The MH company valuation with multiples (Appendix 5)
You are also asked to assess the
equity value of the MH company with the multiples of its operating income and net income using Appendix 5.
Business Valuation using multiples
A sample of three comparable companies (A, B and C) has been selected to evaluate the MH company.
The value drivers (or multiples) used for comparison are following:
· the forecasted (N+1) operating income,
· the forecasted (N+1) net income.
Concerning the MH company, the forecasted operating income is estimated to be 350 kSAR and the net income part of the group is estimated at 230 kSAR.
1.6 Conclude on the opportunity for the Group ITG to acquire the MH company. brief note for the members of the Board of Directors in the form of a summary note to explain if ITG Group should buy or not the MH company .
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