industry multiplies global report

Industry Multiples Global Report Standard Edition

March 2006

IMGR SE – MARCH 2006

Copyright © 2006 Valmetrics 2 / 71

The Industry Multiples Global Report (IMGR) Standard Edition is a free quarterly publication delivering valuation multiples for main industries to help both investors and entrepreneurs approximate the value of a company. The IMGR SE covers 114 industries, 27 countries, 8,000 public companies and includes calculations of 5 different market multiples (EV/sales, EV/EBITDA, EV/EBIT, PER, PBR), descriptive statistics at the industry level, best multiples selection, multiple rating and a text description of each industry. In the appendices section, Valmetrics also provides the information you need to understand and interpret data shown in this document, including: data source and coverage, date schedule, multiples selection, multiples rating, glossary, adjustments / possible biases, and references. Any comments or suggestions to improve the IMGR are very welcome. It’s easy to sign up for the IMGR service! Simply email “subscribe IMGR” with your contact details to [email protected]. Your personal data will not be transmitted to any third party and you maintain the option of unsubscribing whenever you wish (email: “unsubscribe IMGR”). To help keep IMGR SE a free service, please tell your friends and colleagues about us. Readers agree that: i) the contents of this report are communicated on a purely informative basis ii) Information appearing in this report does not constitute an instruction or advice to acquire, dispose, transfer or manage a company. Tables, data, logos, trademark included in this report are the property of Valmetrics and are protected by international copyright laws. This service is brought to you by Valmetrics Research, a service of Valmetrics. Valmetrics is a Swiss-based corporation delivering comprehensive and authoritative financial metrics for business valuation without incurring extensive costs in time and effort. To know more about us, visit our website www.valmetrics.com. If you are interested in advertising in our research publications or partnering with us, please email us at [email protected].



IMGR Professional – BETA version now available!! We are pleased to offer a 2 month free trial of IMGR Pro Beta to subscribers who signed-up for the Standard Edition before April 15, 2006. To run the beta version, you will need to have Microsoft Access installed on your computer. The final version of IMGR Pro will be available on the Internet (web based application) in June 2006. IMGR Pro is a powerful, yet easy-to-use, tool to value an industry or a business. The professional version offers 6 key advantages compared to the Standard Edition:

IMGR PRO = more multiples, more analysis, more industry insights, more tools! Achieve faster valuation & modelling, compare 130 industries, fine tune your

investment policy and put forward persuasive arguments in negotiation.

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Data is updated on a monthly basis, so you do not need to wait for a quarter to get the most recent multiples.

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With 11 geographical zones covered, you have access to regional metrics and analytics (e.g. North America, Europe).

Individual multiples

Lists of individual multiples enable you to find comparables, understand Valmetrics analysis and perform your own analysis.

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Historical data

Historical multiples stored in IMGR Pro date back to January 2000 (5 years) and give you an additional dynamic overview.

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LIST OF INDUSTRIES

1. Advertising........................................................................................................................................................ 7 2. Aerospace & Defense....................................................................................................................................... 7 3. Agricultural Products........................................................................................................................................ 8 4. Air Freight & Logistics...................................................................................................................................... 8 5. Airlines .............................................................................................................................................................. 9 6. Airport Services ................................................................................................................................................ 9 7. Alternative Carriers ........................................................................................................................................ 10 8. Aluminium....................................................................................................................................................... 10 9. Apparel Retail ................................................................................................................................................. 11 10. Apparel, Accessories & Luxury Goods .......................................................................................................... 11 11. Application Software ...................................................................................................................................... 12 12. Auto Parts & Equipment ................................................................................................................................ 12 13. Automobile Manufacturers............................................................................................................................. 13 14. Biotechnology ................................................................................................................................................. 13 15. Brewers ........................................................................................................................................................... 14 16. Broadcasting & Cable TV ............................................................................................................................... 14 17. Building Products............................................................................................................................................ 15 18. Casinos & Gaming .......................................................................................................................................... 15 19. Catalogue retail .............................................................................................................................................. 16 20. Commercial Printing....................................................................................................................................... 16 21. Commodity Chemicals.................................................................................................................................... 17 22. Computer & Electronics Retail....................................................................................................................... 17 23. Computer Hardware....................................................................................................................................... 18 24. Computer Storage & Peripherals................................................................................................................... 18 25. Construction & Engineering........................................................................................................................... 19 26. Construction & Farm Machinery & Heavy Trucks ........................................................................................ 19 27. Construction Materials ................................................................................................................................... 20 28. Consumer Electronics..................................................................................................................................... 20 29. Data Processing & Outsourced Services....................................................................................................... 21 30. Department Stores ......................................................................................................................................... 21 31. Distillers & Vintners........................................................................................................................................ 22 32. Distributors ..................................................................................................................................................... 22 33. Diversified Chemicals ..................................................................................................................................... 23 34. Diversified Commercial Services ................................................................................................................... 23 35. Diversified Metals & Mining ........................................................................................................................... 24 36. Drug Retail...................................................................................................................................................... 24 37. Electric Utilities ............................................................................................................................................... 25 38. Electrical Components & Equipment............................................................................................................. 25 39. Electronic Equipment Manufacturers ............................................................................................................ 26 40. Electronic Manufacturing Services ................................................................................................................ 26 41. Employment Services..................................................................................................................................... 27 42. Environmental Services.................................................................................................................................. 27 43. Fertilizers & Agricultural Chemicals............................................................................................................... 28 44. Food Distributors............................................................................................................................................ 28 45. Food Retail...................................................................................................................................................... 29 46. Footwear......................................................................................................................................................... 29 47. Forest Products .............................................................................................................................................. 30 48. Gas Utilities..................................................................................................................................................... 30 49. General Merchandise Stores.......................................................................................................................... 31 50. Gold................................................................................................................................................................. 31 51. Health Care Services...................................................................................................................................... 32 52. Health Care Distributors ................................................................................................................................ 32 53. Health Care Equipment.................................................................................................................................. 33 54. Health Care Facilities ..................................................................................................................................... 33 55. Health Care Supplies...................................................................................................................................... 34 56. Heavy Electrical Equipment........................................................................................................................... 34



57. Highways & Railtracks ................................................................................................................................... 35 58. Home Entertainment Software...................................................................................................................... 35 59. Home Furnishings .......................................................................................................................................... 36 60. Homebuilding ................................................................................................................................................. 36 61. Home Improvement Retail ............................................................................................................................ 37 62. Hotels, Resorts & Cruise Lines ...................................................................................................................... 37 63. Household Appliances .................................................................................................................................... 38 64. Household Products ....................................................................................................................................... 38 65. Housewares & Specialities............................................................................................................................. 39 66. Hypermarkets & Super Centers..................................................................................................................... 39 67. Industrial Conglomerates .............................................................................................................................. 40 68. Industrial Gases.............................................................................................................................................. 40 69. Industrial Machinery ...................................................................................................................................... 41 70. Integrated Oil & Gas ...................................................................................................................................... 41 71. Integrated Telecommunication Services ...................................................................................................... 42 72. Internet Retail ................................................................................................................................................ 42 73. Internet Software & Services ........................................................................................................................ 43 74. IT Consulting & Other Services..................................................................................................................... 43 75. Leisure Facilities ............................................................................................................................................. 44 76. Leisure Products............................................................................................................................................. 44 77. Managed Health Care .................................................................................................................................... 45 78. Marine ............................................................................................................................................................. 45 79. Marine Ports & Services................................................................................................................................. 46 80. Metal & Glass Containers............................................................................................................................... 46 81. Motorcycle Manufacturers ............................................................................................................................. 47 82. Movies & Entertainment ................................................................................................................................ 47 83. Multi-Utilities & Unregulated Power .............................................................................................................. 48 84. Office Electronics............................................................................................................................................ 48 85. Office Services & Supplies ............................................................................................................................. 49 86. Oil & Gas Drilling ............................................................................................................................................ 49 87. Oil & Gas Equipment & Services ................................................................................................................... 50 88. Oil & Gas Exploration & Production .............................................................................................................. 50 89. Oil & Gas Refining, Marketing & Transportation.......................................................................................... 51 90. Packaged Foods & Meats............................................................................................................................... 51 91. Paper Packaging............................................................................................................................................. 52 92. Paper Products ............................................................................................................................................... 52 93. Personal Products........................................................................................................................................... 53 94. Pharmaceuticals ............................................................................................................................................. 53 95. Photographic Products ................................................................................................................................... 54 96. Precious Metals & Minerals............................................................................................................................ 54 97. Publishing ....................................................................................................................................................... 55 98. Railroads ......................................................................................................................................................... 55 99. Restaurants..................................................................................................................................................... 56 100. Semiconductor Equipment............................................................................................................................. 56 101. Semiconductors .............................................................................................................................................. 57 102. Soft Drink........................................................................................................................................................ 57 103. Specialty Chemicals........................................................................................................................................ 58 104. Specialty Stores.............................................................................................................................................. 58 105. Steel ................................................................................................................................................................ 59 106. Systems Software........................................................................................................................................... 59 107. Technology Distributors................................................................................................................................. 60 108. Textiles............................................................................................................................................................ 60 109. Tires & Rubber ............................................................................................................................................... 61 110. Tobacco .......................................................................................................................................................... 61 111. Trading Companies & Distributors ................................................................................................................ 62 112. Trucking .......................................................................................................................................................... 62 113. Water Utilities ................................................................................................................................................. 63 114. Wireless Telecommunication Services .......................................................................................................... 63



1. Advertising

Companies providing advertising, marketing or public relations services.

Table 1 EV / Sales EV / EBITDA EV / EBIT PER PBR

Number of observations 57 57 57 57 57 Non available multiples 8 7 7 6 6 Non meaningful multiples 6 10 14 12 8 Short-listed multiples 43 40 36 39 43 Minimum 0.18x 2.3x 3.9x 3.6x 0.2x 1st quartile 0.59x 5.0x 7.9x 15.5x 1.2x Median 0.89x 9.9x 11.6x 22.7x 2.5x 3rd quartile 1.61x 12.1x 14.7x 44.0x 3.3x Maximum 3.21x 24.5x 34.9x 68.1x 6.6x Mean 1.20x 9.9x 12.3x 28.5x 2.6x Std deviation as % of mean 66% 55% 52% 64% 63% Modal interval [0.58 - 1.17[ [9.2 - 13.4[ [11.1 - 15.2[ [2.2 - 19.1[ [2.4 - 3.5[ Modal interval frequency 30.2% 37.5% 36.1% 35.9% 34.9% Mode estimate 0.82x 10.9x 12.8x 17.9x 2.6x Valmetrics multiple 0.82x 10.9x 12.8x 17.9x 2.6x Multiple rating (10=highest) 4 9 9 2 5

2. Aerospace & Defense

Manufacturers of civil or military aerospace and defense equipment, parts or products. Includes defense electronics and space equipment.


Number of observations 87 87 87 87 87 Non available multiples 12 13 12 12 12 Non meaningful multiples 7 13 15 22 12 Short-listed multiples 68 61 60 53 63 Minimum 0.05x 4.3x 5.0x 9.8x 0.8x 1st quartile 0.85x 9.8x 13.1x 18.7x 1.8x Median 1.42x 12.0x 16.2x 23.2x 2.4x 3rd quartile 1.83x 14.7x 20.6x 29.5x 3.4x Maximum 3.23x 21.1x 34.4x 50.4x 5.7x Mean 1.45x 12.4x 17.2x 25.5x 2.5x Std deviation as % of mean 50% 31% 36% 40% 43% Modal interval [0.97 - 1.45[ [8.9 - 11.4[ [12 - 15.9[ [18.7 - 24.4[ [1.6 - 2.4[ Modal interval frequency 26.5% 27.9% 33.3% 30.2% 31.7% Mode estimate 1.05x 11.0x 15.0x 22.8x 2.1x Valmetrics multiple 1.45x 12.4x 17.2x 25.5x 2.5x Multiple rating (10=highest) 6 9 9 8 5



3. Agricultural Products

Producers of agricultural products. Includes crop growers, owners of plantations and companies that produce and process foods but do not package and market them. Excludes companies classified in the Forest Products sub-industry and those that package and market the food products classified in the Packaged Foods sub-industry.


Number of observations 75 75 75 75 75 Non available multiples 6 6 6 4 4 Non meaningful multiples 16 22 28 29 17 Short-listed multiples 53 47 41 42 54 Minimum 0.17x 2.4x 3.2x 7.0x 0.2x 1st quartile 0.63x 7.9x 11.8x 13.9x 1.0x Median 1.13x 11.6x 15.4x 20.3x 1.4x 3rd quartile 1.97x 18.4x 22.2x 30.2x 1.8x Maximum 5.29x 36.7x 51.4x 59.2x 4.2x Mean 1.46x 13.4x 18.4x 22.8x 1.5x Std deviation as % of mean 75% 57% 55% 53% 52% Modal interval [0 - 0.71[ [7.9 - 13.7[ [9.2 - 15.3[ [4.9 - 14.3[ [1 - 1.5[ Modal interval frequency 34.0% 38.3% 34.1% 33.3% 25.9% Mode estimate 0.56x 10.2x 12.7x 13.7x 1.3x Valmetrics multiple 0.56x 10.2x 15.4x 20.3x 1.4x Multiple rating (10=highest) 1 5 4 3 5

4. Air Freight & Logistics

Companies providing air freight transportation, courier and logistics services, including package and mail delivery and customs agents. Excludes those companies classified in the Airlines, Marine or Trucking sub-industries.





5. Airlines

Companies providing primarily passenger air transportation.


Number of observations 47 47 47 47 47 Non available multiples 6 5 5 4 3 Non meaningful multiples 2 12 14 20 11 Short-listed multiples 39 30 28 23 33 Minimum 0.10x 2.3x 1.2x 5.6x 0.0x 1st quartile 0.40x 5.0x 10.7x 10.5x 1.0x Median 0.74x 7.4x 15.8x 13.0x 1.4x 3rd quartile 1.26x 10.2x 22.7x 18.0x 1.6x Maximum 2.24x 20.4x 59.1x 34.9x 2.3x Mean 0.86x 8.0x 18.8x 14.3x 1.3x Std deviation as % of mean 70% 54% 75% 48% 40% Modal interval [0 - 0.51[ [4.6 - 8[ [7.9 - 15.8[ [9.6 - 14.9[ [1.1 - 1.5[ Modal interval frequency 35.9% 33.3% 28.6% 52.2% 33.3% Mode estimate 0.42x 6.7x 13.2x 11.8x 1.3x Valmetrics multiple 0.42x 8.0x 15.8x 14.3x 1.3x Multiple rating (10=highest) 2 7 3 6 5

6. Airport Services

Operators of airports and companies providing related services.





7. Alternative Carriers

Providers of communications and high-density data transmission services primarily through a high bandwidth/fibber-optic cable network.


Number of observations 27 27 27 27 27 Non available multiples 8 7 7 7 7 Non meaningful multiples 1 6 16 16 5 Short-listed multiples 18 14 4 4 15 Minimum 0.04x 0.2x nm nm 0.1x 1st quartile 0.68x 4.0x nm nm 1.0x Median 1.03x 8.2x nm nm 1.2x 3rd quartile 2.89x 13.8x nm nm 1.9x Maximum 5.01x 27.9x nm nm 6.0x Mean 1.71x 10.0x nm nm 1.7x Std deviation as % of mean 87% 79% nm nm 90% Modal interval [0 - 1.69[ [0 - 8.1[ nm nm [0.7 - 1.4[ Modal interval frequency 61.1% 50.0% nm nm 40.0% Mode estimate 1.09x 6.3x nm nm 1.0x Valmetrics multiple 1.03x 8.2x nm nm 1.2x Multiple rating (10=highest) 2 2 na na 2

8. Aluminium

Producers of aluminium and related products, including companies that mine or process bauxite and companies that recycle aluminium to produce finished or semi-finished products. Excludes companies that primarily produce aluminium building materials classified in the Building Products sub-industry.





9. Apparel Retail

Retailers specialized mainly in apparel and accessories.



10. Apparel, Accessories & Luxury Goods

Manufacturers of apparel, accessories & luxury goods. Includes companies primarily producing designer handbags, wallets, luggage, jewellery and watches. Excludes shoes classified in the Footwear sub-industry.


Number of observations 142 142 142 142 142 Non available multiples 3 3 1 2 1 Non meaningful multiples 21 36 47 55 23 Short-listed multiples 118 103 94 85 118 Minimum 0.04x 0.5x 1.0x 3.1x 0.2x 1st quartile 0.47x 5.9x 8.4x 10.4x 0.9x Median 0.83x 8.3x 12.1x 16.5x 1.6x 3rd quartile 1.54x 12.1x 18.1x 24.7x 2.6x Maximum 4.46x 24.0x 36.4x 59.4x 6.1x Mean 1.18x 9.8x 13.5x 19.1x 2.0x Std deviation as % of mean 86% 54% 54% 61% 71% Modal interval [0.44 - 0.88[ [5.7 - 8.3[ [8.5 - 12.8[ [8.5 - 15[ [0.7 - 1.4[ Modal interval frequency 31.4% 26.2% 26.6% 25.9% 28.0% Mode estimate 0.63x 6.8x 10.1x 14.3x 1.1x Valmetrics multiple 0.63x 8.3x 12.1x 16.5x 1.6x Multiple rating (10=highest) 2 4 5 5 4



11. Application Software

Companies engaged in developing and producing software designed for specialized applications for the business or consumer market. Includes enterprise and technical software. Excludes companies classified in the Home Entertainment Software Sub-Industry. Also excludes companies producing systems or database management software classified in the Systems Software sub-industry.



12. Auto Parts & Equipment

Manufacturers of parts and accessories for automobiles and motorcycles. Excludes companies classified in the Tires & Rubber sub-industry.





13. Automobile Manufacturers

Companies that produce mainly passenger automobiles and light trucks. Excludes companies producing mainly motorcycles and three-wheelers classified in the Motorcycle Manufacturers sub-industry and heavy duty trucks classified in the Construction & Farm Machinery & Heavy Trucks sub-industry.


Number of observations 43 43 43 43 43 Non available multiples 1 1 1 0 0 Non meaningful multiples 8 12 16 15 11 Short-listed multiples 34 30 26 28 32 Minimum 0.13x 2.3x 3.4x 1.1x 0.1x 1st quartile 0.41x 5.4x 7.9x 7.9x 0.9x Median 0.58x 8.3x 12.8x 11.4x 1.3x 3rd quartile 0.92x 10.3x 17.8x 15.4x 1.7x Maximum 1.92x 17.8x 25.8x 34.5x 2.8x Mean 0.73x 8.2x 13.1x 13.1x 1.3x Std deviation as % of mean 61% 45% 48% 60% 47% Modal interval [0.4 - 0.71[ [8.5 - 11.6[ [8 - 14.6[ [10.5 - 15.4[ [1 - 1.5[ Modal interval frequency 44.1% 30.0% 42.3% 35.7% 31.3% Mode estimate 0.57x 8.9x 10.6x 11.6x 1.4x Valmetrics multiple 0.57x 8.2x 13.1x 11.4x 1.3x Multiple rating (10=highest) 6 9 5 6 5

14. Biotechnology

Companies primarily involved in the development, manufacturing or marketing of products based on advanced biotechnology research.


Number of observations 214 214 214 214 214 Non available multiples 31 32 23 21 20 Non meaningful multiples 41 135 145 155 33 Short-listed multiples 142 47 46 38 161 Minimum 0.07x 0.1x 0.0x 4.2x 0.0x 1st quartile 3.11x 12.3x 14.4x 21.1x 1.5x Median 6.18x 16.5x 23.4x 34.3x 2.7x 3rd quartile 15.13x 29.8x 38.0x 62.3x 4.6x Maximum 33.76x 69.7x 104.0x 157.9x 10.8x Mean 10.06x 22.6x 30.8x 48.6x 3.4x Std deviation as % of mean 93% 81% 89% 80% 72% Modal interval [0 - 4.61[ [9.7 - 19.4[ [13.2 - 26.3[ [0 - 24.5[ [1.1 - 2.3[ Modal interval frequency 39.4% 31.9% 30.4% 34.2% 30.4% Mode estimate 3.35x 14.5x 19.7x 24.5x 1.8x Valmetrics multiple 3.35x 14.5x 19.7x 24.5x 1.8x Multiple rating (10=highest) 2 2 2 1 2



15. Brewers

Producers of beer and malt liquors. Includes breweries not classified in the Restaurants sub-industry.


Number of observations 48 48 48 48 48 Non available multiples 8 8 8 8 8 Non meaningful multiples 10 12 9 9 7 Short-listed multiples 30 28 31 31 33 Minimum 0.09x 4.0x 1.4x 3.8x 0.5x 1st quartile 1.07x 8.6x 10.3x 13.8x 1.5x Median 1.72x 10.3x 14.2x 21.6x 1.8x 3rd quartile 2.28x 10.9x 18.2x 30.6x 2.7x Maximum 3.82x 14.2x 36.6x 62.8x 4.7x Mean 1.82x 9.5x 15.0x 24.0x 2.1x Std deviation as % of mean 54% 27% 51% 61% 45% Modal interval [0.78 - 1.56[ [9.8 - 11.4[ [10 - 15[ [11.9 - 22.6[ [1.1 - 1.8[ Modal interval frequency 33.3% 42.9% 29.0% 32.3% 45.5% Mode estimate 1.56x 10.5x 13.8x 20.5x 1.6x Valmetrics multiple 1.82x 9.5x 15.0x 21.6x 1.6x Multiple rating (10=highest) 8 7 10 8 5

16. Broadcasting & Cable TV

Owners and operators of television or radio broadcasting systems and providers of cable or satellite television services, including programming.


Number of observations 108 108 108 108 108 Non available multiples 13 13 13 13 12 Non meaningful multiples 12 20 27 33 19 Short-listed multiples 83 75 68 62 77 Minimum 0.10x 0.1x 0.1x 2.9x 0.1x 1st quartile 1.88x 6.5x 10.2x 16.4x 1.2x Median 2.73x 10.1x 13.9x 23.4x 1.9x 3rd quartile 3.55x 12.5x 18.0x 32.0x 3.4x Maximum 7.03x 21.3x 34.2x 61.5x 7.1x Mean 2.79x 9.9x 14.6x 25.2x 2.5x Std deviation as % of mean 52% 46% 48% 53% 73% Modal interval [1.53 - 2.29[ [8.5 - 11.4[ [11.5 - 15.3[ [16.5 - 24.3[ [1 - 2.1[ Modal interval frequency 22.9% 33.3% 26.5% 33.9% 37.7% Mode estimate 2.09x 9.9x 13.5x 20.4x 1.5x Valmetrics multiple 2.79x 9.9x 14.6x 25.2x 1.5x Multiple rating (10=highest) 6 10 9 7 3



17. Building Products

Manufacturers of building components and home improvement products and equipment. Excludes lumber and plywood classified under Forest Products and cement and other materials classified in the Construction Materials sub-industry.


Number of observations 139 139 139 139 139 Non available multiples 18 22 18 18 18 Non meaningful multiples 17 28 37 40 20 Short-listed multiples 104 89 84 81 101 Minimum 0.04x 0.7x 1.1x 0.5x 0.2x 1st quartile 0.55x 5.6x 7.6x 11.7x 1.1x Median 0.86x 7.2x 10.8x 15.0x 1.7x 3rd quartile 1.39x 9.5x 13.2x 18.2x 2.4x Maximum 2.92x 20.1x 26.3x 34.2x 4.9x Mean 1.02x 8.0x 11.2x 15.4x 1.9x Std deviation as % of mean 64% 48% 44% 44% 58% Modal interval [0.35 - 0.71[ [6.9 - 8.7[ [8.6 - 11.2[ [15 - 18[ [1.2 - 1.7[ Modal interval frequency 27.9% 24.7% 26.2% 24.7% 23.8% Mode estimate 0.62x 7.1x 10.4x 15.8x 1.7x Valmetrics multiple 0.86x 8.0x 11.2x 15.4x 1.9x Multiple rating (10=highest) 4 8 9 8 5

18. Casinos & Gaming

Owners and operators of casinos and gaming facilities. Includes companies providing lottery and betting services.





19. Catalogue retail

Mail order and TV home shopping retailers. Includes companies that provide door-to-door retail.


Number of observations 20 20 20 20 20 Non available multiples 1 1 1 1 1 Non meaningful multiples 1 5 4 6 4 Short-listed multiples 18 14 15 13 15 Minimum 0.12x 5.9x 7.9x 11.3x 1.1x 1st quartile 0.59x 8.6x 10.3x 18.6x 1.9x Median 1.08x 9.8x 14.1x 22.8x 2.9x 3rd quartile 1.34x 10.9x 16.4x 28.1x 3.7x Maximum 2.06x 12.6x 27.4x 38.0x 4.5x Mean 0.99x 9.6x 14.8x 23.3x 2.8x Std deviation as % of mean 51% 21% 39% 31% 41% Modal interval [1.15 - 1.72[ [9.3 - 11.2[ [7.8 - 12.7[ [16.6 - 24.6[ [0.6 - 2[ Modal interval frequency 44.4% 42.9% 40.0% 46.2% 33.3% Mode estimate 1.36x 10.2x 12.7x 22.0x 2.0x Valmetrics multiple 1.08x 9.6x 14.8x 23.3x 2.8x Multiple rating (10=highest) 4 8 8 8 5

20. Commercial Printing

Companies providing commercial printing services. Includes printers primarily serving the media industry.





21. Commodity Chemicals

Companies that primarily produce industrial chemicals and basic chemicals. Including but not limited to plastics, synthetic fibbers, films, commodity-based paints & pigments, explosives and petrochemicals. Excludes chemical companies classified in the Diversified Chemicals, Fertilizers & Agricultural Chemicals, Industrial Gases, or Specialty Chemicals sub-industries.


Number of observations 186 186 186 186 186 Non available multiples 7 8 7 5 5 Non meaningful multiples 36 47 59 66 37 Short-listed multiples 143 131 120 115 144 Minimum 0.08x 0.8x 1.0x 0.6x 0.1x 1st quartile 0.65x 5.4x 8.1x 9.5x 0.9x Median 1.00x 8.1x 13.2x 14.8x 1.4x 3rd quartile 1.43x 11.4x 19.2x 26.5x 1.8x Maximum 2.83x 20.0x 42.2x 68.5x 3.5x Mean 1.10x 8.9x 15.0x 20.9x 1.4x Std deviation as % of mean 54% 49% 60% 78% 51% Modal interval [0.89 - 1.19[ [4.7 - 7[ [9 - 13.5[ [7 - 14[ [1.1 - 1.4[ Modal interval frequency 25.9% 26.0% 27.5% 29.6% 22.2% Mode estimate 0.99x 5.8x 10.8x 11.0x 1.2x Valmetrics multiple 1.00x 8.9x 13.2x 14.8x 1.4x Multiple rating (10=highest) 8 4 5 2 5

22. Computer & Electronics Retail

Owners and operators of consumer electronics, computers, video and related products retail stores.


Number of observations 26 26 26 26 26 Non available multiples 3 3 3 2 2 Non meaningful multiples 2 4 7 7 2 Short-listed multiples 21 19 16 17 22 Minimum 0.12x 3.0x 3.7x 6.1x 0.5x 1st quartile 0.34x 6.2x 7.9x 12.1x 1.9x Median 0.41x 8.6x 9.9x 14.1x 2.4x 3rd quartile 0.62x 12.2x 12.7x 19.8x 3.4x Maximum 1.04x 20.0x 16.4x 31.9x 6.0x Mean 0.47x 9.2x 10.2x 16.0x 2.6x Std deviation as % of mean 55% 48% 39% 44% 54% Modal interval [0.27 - 0.47[ [2.5 - 7[ [6.2 - 10[ [10 - 16[ [2.2 - 3.3[ Modal interval frequency 33.3% 36.8% 31.3% 35.3% 27.3% Mode estimate 0.41x 6.4x 10.0x 13.0x 2.9x Valmetrics multiple 0.41x 9.2x 10.2x 16.0x 2.4x Multiple rating (10=highest) 7 5 8 6 5



23. Computer Hardware

Manufacturers of personal computers, servers, mainframes and workstations. Includes manufacturers of Automatic Teller Machines (ATMs). Excludes manufacturers of copiers, faxes and related products classified in the Office Electronics sub-industry.



24. Computer Storage & Peripherals

Manufacturers of electronic computer components and peripherals. Includes data storage components, motherboards, audio and video cards, monitors, keyboards, printers and other peripherals. Excludes semiconductors classified in the Semiconductors sub-industry.


Number of observations 111 111 111 111 111 Non available multiples 14 15 14 14 14 Non meaningful multiples 16 30 40 47 19 Short-listed multiples 81 66 57 50 78 Minimum 0.05x 0.6x 0.5x 1.5x 0.0x 1st quartile 0.52x 5.2x 7.1x 10.7x 1.1x Median 0.85x 9.4x 11.8x 18.2x 1.4x 3rd quartile 1.19x 13.3x 19.8x 25.7x 2.1x Maximum 2.60x 29.8x 43.5x 53.9x 4.5x Mean 0.93x 10.3x 14.9x 20.8x 1.6x Std deviation as % of mean 63% 65% 72% 63% 60% Modal interval [0.61 - 0.92[ [4 - 8[ [6.6 - 13.2[ [16.3 - 24.5[ [0.9 - 1.4[ Modal interval frequency 25.9% 28.8% 29.8% 32.0% 30.8% Mode estimate 0.74x 6.6x 10.7x 18.5x 1.3x Valmetrics multiple 0.85x 9.4x 11.8x 18.5x 1.4x Multiple rating (10=highest) 7 4 4 8 5



25. Construction & Engineering

Companies engaged in primarily non-residential construction. Includes civil engineering companies and large-scale contractors. Excludes companies classified in the Homebuilding sub-industry.



26. Construction & Farm Machinery & Heavy Trucks

Manufacturers of heavy duty trucks, rolling machinery, earth-moving and construction equipment, heavy farm machinery and manufacturers of related parts. Includes non-military shipbuilding.





27. Construction Materials

Manufacturers of construction materials including sand, clay, gypsum, lime, aggregates, cement, concrete and bricks. Other finished or semi-finished building materials are classified in the Building Products sub-industry.


Number of observations 115 115 115 115 115 Non available multiples 8 8 8 8 8 Non meaningful multiples 14 27 33 31 22 Short-listed multiples 93 80 74 76 85 Minimum 0.16x 2.0x 4.6x 3.7x 0.4x 1st quartile 1.05x 7.0x 10.3x 11.1x 1.0x Median 1.83x 8.6x 13.4x 14.7x 1.4x 3rd quartile 2.56x 10.8x 17.9x 22.0x 1.9x Maximum 4.08x 15.6x 32.0x 40.6x 4.0x Mean 1.87x 8.9x 14.3x 16.4x 1.6x Std deviation as % of mean 53% 34% 41% 49% 52% Modal interval [1.46 - 2.12[ [7 - 8.8[ [7.4 - 11.1[ [11.9 - 17[ [0.7 - 1.2[ Modal interval frequency 25.8% 30.0% 25.7% 31.6% 23.5% Mode estimate 1.69x 8.0x 11.1x 14.1x 1.1x Valmetrics multiple 1.87x 8.9x 14.3x 16.4x 1.4x Multiple rating (10=highest) 8 9 6 8 5

28. Consumer Electronics

Manufacturers of consumer electronics products including TVs, VCRs, hi-fi equipment, game consoles and related products. Excludes personal home computer manufacturers classified in the Computer Hardware sub-industry, and electric household appliances classified in the Household Appliances sub-industry.





29. Data Processing & Outsourced Services

Providers of commercial electronic data processing and/or business process outsourcing services. Includes companies that provide services for back-office automation.



30. Department Stores

Owners and operators of department stores.





31. Distillers & Vintners

Distillers, vintners and producers of alcoholic beverages not classified in the Brewers sub-industry.


Number of observations 43 43 43 43 43 Non available multiples 1 1 1 1 0 Non meaningful multiples 2 5 8 11 6 Short-listed multiples 40 37 34 31 37 Minimum 0.21x 6.2x 8.5x 9.7x 0.4x 1st quartile 1.32x 10.6x 14.8x 20.1x 1.4x Median 2.52x 13.5x 17.7x 25.7x 1.8x 3rd quartile 4.20x 17.5x 24.2x 34.4x 2.8x Maximum 8.82x 28.5x 42.6x 78.3x 5.3x Mean 3.03x 14.5x 20.9x 29.4x 2.1x Std deviation as % of mean 69% 38% 44% 52% 53% Modal interval [1.68 - 3.36[ [9 - 13.2[ [14 - 19.8[ [16.7 - 25.8[ [1.1 - 1.9[ Modal interval frequency 32.5% 32.4% 52.9% 38.7% 35.1% Mode estimate 2.35x 11.5x 16.9x 22.3x 1.6x Valmetrics multiple 2.35x 14.5x 16.9x 22.3x 1.6x Multiple rating (10=highest) 6 7 6 5 5

32. Distributors

Distributors and wholesalers of general merchandise not classified elsewhere. Includes vehicle distributors.


Number of observations 83 83 83 83 83 Non available multiples 9 10 8 8 8 Non meaningful multiples 8 17 22 18 7 Short-listed multiples 66 56 53 57 68 Minimum 0.04x 0.1x 0.1x 0.5x 0.1x 1st quartile 0.26x 5.9x 6.6x 8.5x 0.8x Median 0.44x 8.2x 11.2x 11.4x 1.3x 3rd quartile 0.79x 13.5x 16.1x 17.9x 1.9x Maximum 1.81x 28.0x 33.0x 47.3x 3.5x Mean 0.57x 10.2x 12.5x 15.4x 1.4x Std deviation as % of mean 77% 65% 62% 70% 56% Modal interval [0.01 - 0.27[ [4 - 8[ [10.1 - 15.1[ [9.7 - 14.6[ [0.5 - 1[ Modal interval frequency 28.8% 37.5% 34.0% 28.1% 27.9% Mode estimate 0.26x 6.6x 11.3x 10.5x 1.0x Valmetrics multiple 0.44x 6.6x 11.3x 11.4x 1.4x Multiple rating (10=highest) 3 2 8 3 5



33. Diversified Chemicals

Manufacturers of a diversified range of chemical products not classified in the Industrial Gases, Commodity Chemicals, Specialty Chemicals or Fertilizers & Agricultural Chemicals sub-industries.



34. Diversified Commercial Services

Companies providing commercial and consumer services not classified elsewhere. Includes commercial cleaning services, education services and security services.


Number of observations 145 145 145 145 145 Non available multiples 16 17 16 15 15 Non meaningful multiples 14 27 35 44 16 Short-listed multiples 115 101 94 86 114 Minimum 0.01x 2.8x 2.0x 0.0x 0.0x 1st quartile 0.67x 6.6x 11.5x 12.0x 1.4x Median 1.14x 9.7x 14.8x 19.8x 2.5x 3rd quartile 2.11x 11.5x 17.5x 26.4x 3.8x Maximum 4.88x 19.5x 30.6x 56.4x 7.7x Mean 1.52x 9.4x 14.8x 20.4x 2.7x Std deviation as % of mean 76% 39% 40% 54% 59% Modal interval [0.59 - 1.18[ [9.1 - 11.2[ [15 - 17.6[ [6.6 - 13.1[ [1 - 2[ Modal interval frequency 31.3% 25.7% 25.5% 22.1% 25.4% Mode estimate 0.81x 10.0x 15.3x 12.3x 1.8x Valmetrics multiple 0.81x 9.4x 14.8x 20.4x 2.7x Multiple rating (10=highest) 2 10 9 3 5



35. Diversified Metals & Mining

Companies engaged in diversified production or extraction of metals and minerals not classified elsewhere. Includes companies that are primarily involved in coal mining or production.


Number of observations 104 104 104 104 104 Non available multiples 20 13 10 8 8 Non meaningful multiples 16 30 33 32 16 Short-listed multiples 68 61 61 64 80 Minimum 0.14x 1.8x 2.1x 0.9x 0.0x 1st quartile 0.94x 6.2x 8.3x 9.9x 1.5x Median 1.62x 8.3x 13.0x 16.2x 2.2x 3rd quartile 2.51x 12.6x 18.8x 28.5x 3.0x Maximum 4.97x 24.7x 35.8x 65.8x 6.4x Mean 1.83x 9.6x 14.7x 21.0x 2.5x Std deviation as % of mean 67% 53% 57% 74% 57% Modal interval [0.77 - 1.54[ [6.7 - 10[ [5.6 - 10.9[ [10.1 - 19.4[ [1.4 - 2.1[ Modal interval frequency 26.5% 32.8% 24.6% 34.4% 26.3% Mode estimate 1.41x 7.9x 10.9x 12.6x 1.9x Valmetrics multiple 1.62x 8.3x 13.0x 12.6x 2.2x Multiple rating (10=highest) 6 6 5 2 5

36. Drug Retail

Owners and operators of primarily drug retail stores and pharmacies.





37. Electric Utilities

Companies that produce or distribute electricity. Includes both nuclear and non-nuclear facilities.



38. Electrical Components & Equipment

Companies that produce electric cables and wires, electrical components or equipment not classified in the Heavy Electrical Equipment sub-industry.





39. Electronic Equipment Manufacturers

Producers of electronic equipment, instruments or components. Includes analytical, electronic test and measurement instruments, electronic components, connection devices and equipment not classified elsewhere. Excludes OEM suppliers classified in the Electronic Manufacturing Services sub-industry.



40. Electronic Manufacturing Services

Producers of electronic equipment mainly for the OEM (Original Equipment Manufacturers) markets.


Number of observations 47 47 47 47 47 Non available multiples 11 12 11 11 11 Non meaningful multiples 1 5 8 13 3 Short-listed multiples 35 30 28 23 33 Minimum 0.03x 1.1x 1.5x 3.7x 0.4x 1st quartile 0.25x 6.0x 8.9x 9.2x 0.9x Median 0.72x 8.0x 15.6x 16.8x 2.0x 3rd quartile 1.39x 11.9x 21.0x 26.7x 2.6x Maximum 3.14x 20.3x 37.4x 36.8x 4.5x Mean 0.91x 9.0x 15.7x 18.5x 2.0x Std deviation as % of mean 85% 55% 55% 57% 57% Modal interval [0 - 0.69[ [3.8 - 7.6[ [8 - 16[ [1.8 - 14.1[ [1.4 - 2.5[ Modal interval frequency 48.6% 33.3% 28.6% 43.5% 36.4% Mode estimate 0.47x 6.7x 16.0x 10.6x 1.5x Valmetrics multiple 0.47x 8.0x 15.7x 16.8x 1.5x Multiple rating (10=highest) 2 6 9 2 5



41. Employment Services

Employment agencies and related services.


Number of observations 59 59 59 59 59 Non available multiples 11 11 11 11 11 Non meaningful multiples 4 11 15 16 7 Short-listed multiples 44 37 33 32 41 Minimum 0.06x 1.4x 2.0x 3.8x 0.3x 1st quartile 0.24x 8.0x 10.5x 18.8x 1.4x Median 0.48x 10.3x 15.7x 23.8x 3.2x 3rd quartile 1.08x 18.8x 25.3x 40.9x 4.3x Maximum 2.49x 32.1x 39.0x 80.7x 7.1x Mean 0.72x 12.9x 16.9x 30.6x 3.1x Std deviation as % of mean 87% 57% 54% 67% 65% Modal interval [0 - 0.48[ [7 - 13.5[ [9.2 - 18.5[ [14.4 - 28.3[ [0.3 - 2[ Modal interval frequency 50.0% 48.6% 48.5% 40.6% 36.6% Mode estimate 0.30x 10.0x 14.1x 20.9x 1.6x Valmetrics multiple 0.30x 10.0x 14.1x 20.9x 1.6x Multiple rating (10=highest) 2 6 7 3 2

42. Environmental Services

Providers of environmental services. Includes waste management and pollution control services. Excludes large-scale water treatment systems classified in the Water Utilities sub-industry.





43. Fertilizers & Agricultural Chemicals

Producers of fertilizers, pesticides, potash or other agriculture-related chemicals not classified elsewhere.



44. Food Distributors

Distributors of food products to other companies and not directly to the consumer.





45. Food Retail

Owners and operators of primarily food retail stores.



46. Footwear

Manufacturers of footwear. Includes sport and leather shoes.


Number of observations 29 29 29 29 29 Non available multiples 3 3 3 3 3 Non meaningful multiples 8 6 14 11 8 Short-listed multiples 18 20 12 15 18 Minimum 0.12x 3.0x 4.3x 6.0x 0.4x 1st quartile 0.42x 5.1x 6.9x 9.4x 1.0x Median 0.53x 8.1x 10.2x 13.5x 1.8x 3rd quartile 0.90x 16.7x 11.2x 19.4x 2.7x Maximum 1.57x 30.5x 12.2x 33.5x 5.5x Mean 0.65x 11.5x 9.1x 15.2x 2.1x Std deviation as % of mean 56% 73% 31% 49% 69% Modal interval [0.11 - 0.48[ [0 - 8.5[ [10.1 - 13.9[ [3.5 - 11.6[ [0.4 - 1.7[ Modal interval frequency 38.9% 55.0% 50.0% 40.0% 50.0% Mode estimate 0.40x 5.2x 11.1x 10.5x 1.3x Valmetrics multiple 0.53x 8.1x 9.1x 15.2x 1.8x Multiple rating (10=highest) 2 1 5 4 2



47. Forest Products

Manufacturers of timber and related wood products. Includes lumber for the building industry.


Number of observations 49 49 49 49 49 Non available multiples 13 14 13 11 11 Non meaningful multiples 7 8 12 16 8 Short-listed multiples 29 27 24 22 30 Minimum 0.43x 2.6x 3.5x 0.1x 0.0x 1st quartile 0.67x 5.7x 9.1x 10.0x 0.9x Median 1.27x 8.1x 13.8x 13.3x 1.2x 3rd quartile 2.89x 19.7x 21.6x 26.4x 1.9x Maximum 5.09x 27.3x 53.3x 89.6x 4.8x Mean 1.89x 11.8x 17.8x 21.8x 1.6x Std deviation as % of mean 80% 69% 77% 96% 71% Modal interval [0 - 1.44[ [1 - 10.3[ [2.3 - 11[ [11.7 - 23.3[ [0.6 - 1.3[ Modal interval frequency 58.6% 66.7% 33.3% 36.4% 43.3% Mode estimate 0.85x 5.9x 11.0x 13.6x 1.0x Valmetrics multiple 1.27x 8.1x 13.8x 13.3x 1.2x Multiple rating (10=highest) 1 2 2 1 5

48. Gas Utilities

Companies whose main charter is to distribute and transmit natural and manufactured gas. Excludes companies primarily involved in gas exploration or production classified in the Oil & Gas Exploration & Production sub-industry. Also excludes diversified midstream natural gas companies classified in the Oil & Gas Refining, Marketing & Transportation sub-industry.


Number of observations 52 52 52 52 52 Non available multiples 5 5 5 5 5 Non meaningful multiples 9 6 8 7 8 Short-listed multiples 38 41 39 40 39 Minimum 0.54x 3.5x 7.4x 0.6x 0.4x 1st quartile 1.30x 8.0x 12.1x 14.4x 1.6x Median 1.56x 9.2x 14.0x 18.0x 1.9x 3rd quartile 2.15x 11.1x 16.9x 23.9x 2.5x Maximum 5.66x 16.1x 22.9x 38.3x 4.3x Mean 1.94x 9.6x 14.2x 18.9x 2.0x Std deviation as % of mean 59% 28% 26% 41% 41% Modal interval [1.35 - 1.85[ [8 - 9.8[ [15.1 - 18[ [16.6 - 22.2[ [1.8 - 2.3[ Modal interval frequency 36.8% 29.3% 28.2% 37.5% 33.3% Mode estimate 1.57x 9.5x 15.5x 18.8x 2.0x Valmetrics multiple 1.57x 9.6x 14.2x 18.9x 2.0x Multiple rating (10=highest) 6 10 9 8 5



49. General Merchandise Stores

Owners and operators of stores offering diversified general merchandise. Excludes hypermarkets and large-scale super centers classified in the “Hypermarkets & Super Centers” sub-industry.


Number of observations 31 31 31 31 31 Non available multiples 5 5 5 5 5 Non meaningful multiples 2 1 3 3 3 Short-listed multiples 24 25 23 23 23 Minimum 0.13x 0.6x 0.3x 14.3x 0.7x 1st quartile 0.60x 8.1x 11.9x 19.6x 1.6x Median 0.82x 9.8x 15.4x 28.4x 1.9x 3rd quartile 1.67x 14.1x 22.7x 42.6x 3.0x Maximum 3.36x 27.2x 30.3x 182.9x 3.4x Mean 1.22x 11.8x 16.5x 43.2x 2.2x Std deviation as % of mean 78% 55% 46% 96% 38% Modal interval [0 - 0.74[ [8.2 - 12.3[ [7.7 - 15.3[ [9.7 - 25.8[ [1.6 - 2.5[ Modal interval frequency 45.8% 40.0% 39.1% 47.8% 39.1% Mode estimate 0.51x 9.8x 13.6x 20.8x 2.3x Valmetrics multiple 0.82x 9.8x 16.5x 28.4x 2.2x Multiple rating (10=highest) 1 6 7 1 5

50. Gold

Producers of gold and related products, including companies that mine or process gold and the South African finance houses which primarily invest in, but do not operate, gold mines.


Number of observations 77 77 77 77 77 Non available multiples 32 13 10 9 9 Non meaningful multiples 6 40 47 45 6 Short-listed multiples 39 24 20 23 62 Minimum 0.39x 4.9x 6.4x 5.0x 0.4x 1st quartile 2.47x 10.3x 13.3x 12.3x 2.2x Median 4.94x 18.7x 29.8x 32.7x 3.6x 3rd quartile 14.02x 27.7x 36.1x 52.8x 5.4x Maximum 29.72x 43.4x 60.8x 129.2x 9.6x Mean 8.92x 20.1x 27.7x 39.3x 4.0x Std deviation as % of mean 102% 59% 59% 87% 58% Modal interval [0 - 6.81[ [0.1 - 12.1[ [0 - 16.8[ [0 - 28.5[ [1.9 - 3.4[ Modal interval frequency 61.5% 33.3% 35.0% 47.8% 32.3% Mode estimate 3.80x 12.1x 14.7x 20.9x 2.8x Valmetrics multiple 3.80x 20.1x 27.7x 32.7x 3.6x Multiple rating (10=highest) 2 3 1 1 5



51. Health Care Services

Providers of health care services not classified elsewhere. Includes dialysis centers and lab testing services.



52. Health Care Distributors

Distributors and wholesalers of health care products not classified elsewhere.


Number of observations 38 38 38 38 38 Non available multiples 6 6 6 4 4 Non meaningful multiples 5 6 7 9 7 Short-listed multiples 27 26 25 25 27 Minimum 0.07x 3.6x 4.9x 2.8x 0.2x 1st quartile 0.34x 10.6x 15.1x 20.8x 1.2x Median 0.63x 13.6x 18.5x 27.0x 2.5x 3rd quartile 1.42x 16.4x 23.0x 36.3x 3.4x Maximum 3.34x 24.7x 35.5x 75.3x 4.9x Mean 0.99x 13.6x 19.2x 30.6x 2.5x Std deviation as % of mean 91% 34% 38% 54% 56% Modal interval [0 - 0.72[ [10.2 - 14.1[ [14.8 - 20.2[ [23.1 - 33.8[ [0 - 1.4[ Modal interval frequency 51.9% 38.5% 40.0% 36.0% 37.0% Mode estimate 0.46x 13.7x 17.7x 26.7x 0.9x Valmetrics multiple 0.63x 13.6x 19.2x 27.0x 2.5x Multiple rating (10=highest) 1 9 9 7 2



53. Health Care Equipment

Manufacturers of health care equipment and devices. Includes medical electronic precision instruments. Includes drug delivery systems.



54. Health Care Facilities

Owners and operators of health care facilities, including hospitals, nursing homes, rehabilitation and retirement centers, animal hospitals, cemeteries and funeral homes.





55. Health Care Supplies

Manufacturers of health care supplies and medical products not classified elsewhere. Includes eye care products.



56. Heavy Electrical Equipment

Manufacturers of power-generating equipment and other heavy electrical equipment, including power turbines, heavy electrical machinery intended for fixed-use and large electrical systems. Excludes cables and wires, classified in the Electrical Components & Equipment sub-industry.


Number of observations 29 29 29 29 29 Non available multiples 3 2 2 1 2 Non meaningful multiples 6 11 12 14 4 Short-listed multiples 20 16 15 14 23 Minimum 0.08x 0.1x 0.1x 0.1x 0.0x 1st quartile 0.76x 6.6x 7.9x 9.7x 1.3x Median 1.25x 10.5x 17.8x 19.4x 2.4x 3rd quartile 1.58x 15.2x 23.2x 25.9x 3.9x Maximum 3.71x 28.0x 33.4x 44.7x 8.3x Mean 1.33x 10.9x 16.0x 19.7x 2.8x Std deviation as % of mean 70% 70% 67% 72% 70% Modal interval [0.6 - 1.2[ [6.8 - 13.6[ [0 - 12.4[ [0 - 13.5[ [1.8 - 3.6[ Modal interval frequency 30.0% 43.8% 40.0% 42.9% 39.1% Mode estimate 1.20x 10.2x 12.4x 11.6x 2.5x Valmetrics multiple 1.25x 10.5x 17.8x 19.4x 2.4x Multiple rating (10=highest) 7 8 4 2 5



57. Highways & Railtracks

Owners and operators of roads, tunnels and railtracks.



58. Home Entertainment Software

Manufacturers of home entertainment software and educational software used primarily in the home.





59. Home Furnishings

Manufacturers of soft home furnishings or furniture, including upholstery, carpets and wall-coverings.



60. Homebuilding

Residential construction companies. Includes manufacturers of prefabricated houses and semi-fixed manufactured homes.





61. Home Improvement Retail

Owners and operators of home and garden improvement retail stores. Includes stores offering building materials and supplies.


Number of observations 20 20 20 20 20 Non available multiples 3 3 3 3 3 Non meaningful multiples 2 1 2 3 3 Short-listed multiples 15 16 15 14 14 Minimum 0.45x 3.5x 8.9x 3.5x 0.6x 1st quartile 0.50x 7.2x 10.0x 11.5x 1.1x Median 0.67x 8.0x 11.0x 13.9x 1.7x 3rd quartile 1.07x 9.7x 12.8x 15.9x 2.8x Maximum 2.26x 11.7x 16.2x 19.3x 3.9x Mean 0.90x 8.3x 11.4x 13.1x 2.0x Std deviation as % of mean 59% 26% 18% 31% 56% Modal interval [0.43 - 0.89[ [6.6 - 8.6[ [8 - 10.3[ [13.3 - 17[ [0.2 - 1.6[ Modal interval frequency 60.0% 37.5% 46.7% 42.9% 42.9% Mode estimate 0.73x 7.9x 9.5x 14.5x 1.4x Valmetrics multiple 0.67x 8.3x 11.4x 13.1x 1.7x Multiple rating (10=highest) 4 9 7 8 4

62. Hotels, Resorts & Cruise Lines

Owners and operators of hotels, resorts and cruise-ships. Includes travel agencies, tour operators and related services not classified elsewhere. Excludes casino-hotels classified in the Casinos & Gaming sub-industry.





63. Household Appliances

Manufacturers of electric household appliances and related products. Includes manufacturers of power and hand tools, including garden improvement tools. Excludes TVs and other audio and video products classified in the Consumer Electronics sub-industry and personal computers classified in the Computer Hardware sub-industry.


Number of observations 68 68 68 68 68 Non available multiples 3 4 3 3 3 Non meaningful multiples 12 13 17 19 11 Short-listed multiples 53 51 48 46 54 Minimum 0.11x 3.3x 5.0x 5.0x 0.1x 1st quartile 0.36x 5.3x 8.9x 11.1x 0.7x Median 0.48x 6.9x 10.0x 15.1x 1.1x 3rd quartile 0.94x 9.2x 14.3x 24.7x 2.6x Maximum 1.86x 16.2x 24.9x 57.3x 5.8x Mean 0.65x 7.6x 11.7x 19.9x 1.8x Std deviation as % of mean 64% 40% 42% 69% 80% Modal interval [0.37 - 0.68[ [4.5 - 6.6[ [7.5 - 10.5[ [12.1 - 19.7[ [0 - 1[ Modal interval frequency 34.0% 27.5% 45.8% 34.8% 50.0% Mode estimate 0.43x 6.0x 9.0x 14.4x 0.6x Valmetrics multiple 0.43x 7.6x 9.0x 14.4x 0.6x Multiple rating (10=highest) 4 7 5 4 2

64. Household Products

Producers of non-durable household products, including detergents, soaps, diapers and other tissue and household paper products not classified in the Paper Products sub-industry.


Number of observations 27 27 27 27 27 Non available multiples 2 2 2 2 2 Non meaningful multiples 5 7 7 9 9 Short-listed multiples 20 18 18 16 16 Minimum 0.17x 4.4x 8.0x 7.4x 0.4x 1st quartile 0.82x 6.8x 10.6x 14.1x 1.1x Median 1.46x 9.2x 12.4x 17.0x 2.5x 3rd quartile 2.22x 11.4x 14.6x 20.5x 3.9x Maximum 3.05x 13.0x 21.0x 24.6x 7.0x Mean 1.58x 9.1x 12.8x 16.7x 2.6x Std deviation as % of mean 58% 31% 26% 29% 69% Modal interval [0.07 - 1.1[ [7 - 10.4[ [9.9 - 13[ [16 - 21.2[ [0.4 - 2.6[ Modal interval frequency 35.0% 38.9% 33.3% 37.5% 50.0% Mode estimate 1.10x 9.3x 13.0x 17.3x 2.4x Valmetrics multiple 1.58x 9.1x 12.8x 16.7x 2.5x Multiple rating (10=highest) 5 8 8 8 5



65. Housewares & Specialities

Manufacturers of durable household products, including cutlery, cookware, glassware, crystal, silverware, utensils, kitchenware and consumer specialties not classified elsewhere.



66. Hypermarkets & Super Centers

Owners and operators of hypermarkets and super centers selling food and a wide-range of consumer staple products. Excludes Food and Drug Retailers classified in the Food Retail and Drug Retail sub-industries, respectively.





67. Industrial Conglomerates

Diversified industrial companies with business activities in three or more sectors, none of which contributes a majority of revenues. Stakes held are predominantly of a controlling nature and stake holders maintain an operational interest in the running of the subsidiaries.


Number of observations 105 105 105 105 105 Non available multiples 19 21 19 14 14 Non meaningful multiples 11 17 24 22 10 Short-listed multiples 75 67 62 69 81 Minimum 0.29x 3.0x 5.4x 0.1x 0.0x 1st quartile 0.74x 7.1x 10.0x 10.7x 1.0x Median 1.56x 10.0x 14.9x 19.6x 1.4x 3rd quartile 2.89x 15.0x 20.9x 33.3x 2.5x Maximum 5.73x 34.2x 42.6x 73.0x 4.9x Mean 1.95x 12.0x 16.6x 24.0x 1.9x Std deviation as % of mean 73% 59% 51% 69% 62% Modal interval [0 - 1.02[ [5 - 8.9[ [10.2 - 15.7[ [0 - 11[ [0.7 - 1.3[ Modal interval frequency 37.3% 35.8% 27.4% 26.1% 35.8% Mode estimate 0.77x 7.4x 11.6x 11.0x 1.1x Valmetrics multiple 0.77x 7.4x 14.9x 19.6x 1.1x Multiple rating (10=highest) 2 3 4 2 3

68. Industrial Gases

Manufacturers of industrial gases.





69. Industrial Machinery

Manufacturers of industrial machinery and industrial components. Includes companies that manufacture presses, machine tools, compressors, pollution control equipment, elevators, escalators, insulators, pumps, roller bearings and other metal fabrications.



70. Integrated Oil & Gas

Integrated oil companies engaged in the exploration & production of oil and gas, as well as at least one other significant activity in either refining, marketing and transportation, or chemicals.





71. Integrated Telecommunication Services

Operators of primarily fixed-line telecommunications networks and companies providing both wireless and fixed-line telecommunications services not classified elsewhere.



72. Internet Retail

Companies providing retail services primarily on the internet, not classified elsewhere.


Number of observations 19 19 19 19 19 Non available multiples 6 7 6 6 6 Non meaningful multiples 3 7 9 9 5 Short-listed multiples 10 5 4 4 8 Minimum 0.21x nm nm nm 1.0x 1st quartile 1.00x nm nm nm 2.2x Median 1.60x nm nm nm 2.5x 3rd quartile 2.17x nm nm nm 3.4x Maximum 2.95x nm nm nm 5.4x Mean 1.55x nm nm nm 2.8x Std deviation as % of mean 56% nm nm nm 51% Modal interval [0 - 1.09[ nm nm nm [2 - 3.2[ Modal interval frequency 40.0% nm nm nm 37.5% Mode estimate 0.88x nm nm nm 2.6x Valmetrics multiple 1.55x nm nm nm 2.8x Multiple rating (10=highest) 3 na na na 5



73. Internet Software & Services

Companies developing and marketing internet software and/or providing internet services including online databases and interactive services, web address registration services, database construction and internet design services. Excludes companies classified in the Internet Retail sub-industry.


Number of observations 205 205 205 205 205 Non available multiples 47 46 44 42 43 Non meaningful multiples 26 71 94 98 24 Short-listed multiples 132 88 67 65 138 Minimum 0.13x 0.0x 0.0x 0.4x 0.0x 1st quartile 0.83x 5.7x 7.6x 16.0x 1.4x Median 1.36x 12.8x 13.9x 27.2x 2.5x 3rd quartile 2.78x 26.4x 27.3x 42.1x 4.9x Maximum 8.34x 62.7x 63.8x 117.5x 10.9x Mean 2.18x 17.5x 18.8x 34.1x 3.3x Std deviation as % of mean 90% 84% 83% 76% 75% Modal interval [0.8 - 1.56[ [0 - 9.3[ [0 - 9.7[ [13 - 26[ [1.3 - 2.7[ Modal interval frequency 29.5% 36.4% 31.3% 24.6% 28.3% Mode estimate 0.98x 6.3x 8.9x 26.0x 1.7x Valmetrics multiple 1.36x 6.3x 8.9x 27.2x 2.5x Multiple rating (10=highest) 2 1 1 5 3

74. IT Consulting & Other Services

Providers of information technology and systems integration services not classified in the Data Processing & Outsourced Services or Internet Software & Services sub-industries. Includes information technology consulting and information management services.





75. Leisure Facilities

Owners and operators of leisure facilities, including sport and fitness centers, stadiums, golf courses and amusement parks not classified in the Movies & Entertainment sub-industry.



76. Leisure Products

Manufacturers of leisure products and equipment including sports equipment, bicycles and toys.





77. Managed Health Care

Owners and operators of Health Maintenance Organizations (HMOs) and other managed plans.


Number of observations 14 14 14 14 14 Non available multiples 7 7 7 3 3 Non meaningful multiples 2 1 1 5 4 Short-listed multiples 5 6 6 6 7 Minimum nm 0.5x 0.5x 21.1x 2.4x 1st quartile nm 2.8x 2.9x 24.1x 3.0x Median nm 8.3x 9.7x 24.9x 3.3x 3rd quartile nm 11.1x 13.1x 26.8x 3.4x Maximum nm 16.6x 18.1x 28.9x 3.8x Mean nm 7.8x 8.8x 25.2x 3.2x Std deviation as % of mean nm 79% 79% 11% 15% Modal interval nm [0 - 9.1[ [0 - 11.2[ [23.6 - 26.5[ [3.1 - 3.5[ Modal interval frequency nm 50.0% 50.0% 50.0% 57.1% Mode estimate nm 9.1x 11.2x 25.5x 3.3x Valmetrics multiple nm 8.3x 9.7x 25.2x 3.2x Multiple rating (10=highest) na 7 5 8 5

78. Marine

Companies providing goods or passenger maritime transportation. Excludes cruise-ships classified in the Hotels, Resorts & Cruise Lines sub-industry.


Number of observations 59 59 59 59 59 Non available multiples 9 10 9 9 9 Non meaningful multiples 8 9 10 12 9 Short-listed multiples 42 40 40 38 41 Minimum 0.08x 0.6x 1.6x 2.3x 0.4x 1st quartile 0.98x 4.5x 5.8x 4.6x 1.1x Median 1.54x 6.3x 9.0x 8.8x 1.5x 3rd quartile 2.21x 8.9x 18.9x 16.8x 2.2x Maximum 4.10x 17.9x 41.3x 35.5x 4.4x Mean 1.67x 7.2x 13.4x 11.2x 1.8x Std deviation as % of mean 55% 55% 81% 75% 55% Modal interval [0.71 - 1.42[ [5.4 - 8[ [0 - 7.7[ [0.8 - 8.1[ [0.8 - 1.5[ Modal interval frequency 33.3% 32.5% 35.0% 44.7% 39.0% Mode estimate 1.23x 5.7x 7.7x 5.9x 1.3x Valmetrics multiple 1.67x 6.3x 7.7x 5.9x 1.3x Multiple rating (10=highest) 6 7 3 1 5



79. Marine Ports & Services

Owners and operators of marine ports and related services.


Number of observations 35 35 35 35 35 Non available multiples 1 1 1 0 0 Non meaningful multiples 2 6 8 10 0 Short-listed multiples 32 28 26 25 35 Minimum 0.49x 2.4x 2.8x 7.0x 0.6x 1st quartile 2.01x 8.1x 10.9x 17.8x 1.6x Median 3.69x 10.5x 15.4x 18.6x 2.1x 3rd quartile 5.17x 13.3x 17.9x 23.4x 3.0x Maximum 10.09x 18.8x 27.7x 32.0x 4.9x Mean 3.69x 10.8x 14.7x 19.5x 2.4x Std deviation as % of mean 66% 43% 42% 30% 45% Modal interval [0.32 - 2.31[ [8.9 - 12.3[ [15.3 - 20[ [17.6 - 21.4[ [1.1 - 1.9[ Modal interval frequency 37.5% 25.0% 30.8% 36.0% 37.1% Mode estimate 1.72x 12.3x 16.1x 20.5x 1.7x Valmetrics multiple 1.72x 10.8x 14.7x 19.5x 2.4x Multiple rating (10=highest) 2 7 8 8 5

80. Metal & Glass Containers

Manufacturers of metal, glass or plastic containers. Includes corks and caps.





81. Motorcycle Manufacturers

Companies that produce motorcycles, scooters or three-wheelers. Excludes bicycles classified in the Leisure Products sub-industry.



82. Movies & Entertainment

Companies that engage in producing and selling entertainment products and services, including companies engaged in the production, distribution and screening of movies and television shows, producers and distributors of music, entertainment theatres and sports teams.


Number of observations 95 95 95 95 95 Non available multiples 10 9 9 8 8 Non meaningful multiples 11 19 43 39 18 Short-listed multiples 74 67 43 48 69 Minimum 0.05x 0.2x 0.2x 0.5x 0.1x 1st quartile 0.58x 4.2x 7.4x 10.2x 1.1x Median 1.12x 6.3x 13.8x 15.6x 1.6x 3rd quartile 1.90x 12.3x 17.8x 24.3x 2.1x Maximum 4.16x 25.0x 34.5x 55.8x 4.6x Mean 1.26x 8.2x 14.1x 18.9x 1.8x Std deviation as % of mean 68% 72% 62% 70% 53% Modal interval [0.63 - 1.26[ [4 - 8[ [11.9 - 17.9[ [7.8 - 15.5[ [1.6 - 2.1[ Modal interval frequency 32.4% 40.3% 32.6% 31.3% 23.2% Mode estimate 0.77x 5.4x 13.7x 13.2x 1.7x Valmetrics multiple 0.77x 5.4x 13.7x 13.2x 1.6x Multiple rating (10=highest) 3 4 9 4 5



83. Multi-Utilities & Unregulated Power

Utility companies with significantly diversified activities in the Electric Utilities, Gas Utilities and/or Water Utilities sub-industries not classified elsewhere. Includes unregulated independent power producers and distributors.



84. Office Electronics

Manufacturers of office electronic equipment including copiers and faxes.


Number of observations 11 11 11 11 11 Non available multiples 4 4 4 4 4 Non meaningful multiples 1 1 2 1 0 Short-listed multiples 6 6 5 6 7 Minimum 0.46x 8.0x nm 9.3x 1.0x 1st quartile 0.77x 8.6x nm 15.0x 1.4x Median 1.05x 9.6x nm 18.3x 1.9x 3rd quartile 1.43x 11.5x nm 23.7x 3.2x Maximum 1.67x 22.1x nm 55.1x 5.1x Mean 1.08x 11.6x nm 23.4x 2.5x Std deviation as % of mean 44% 46% nm 70% 61% Modal interval [0.34 - 1.07[ [6.8 - 10.1[ nm [8.2 - 17.8[ [0.1 - 2.1[ Modal interval frequency 50.0% 50.0% nm 50.0% 57.1% Mode estimate 1.07x 9.3x nm 15.4x 1.4x Valmetrics multiple 1.08x 11.6x nm 18.3x 1.9x Multiple rating (10=highest) 8 6 na 3 2



85. Office Services & Supplies

Providers of office services and manufacturers of office supplies and equipment not classified elsewhere.



86. Oil & Gas Drilling

Drilling contractors or owners of drilling rigs that contract their services for drilling wells


Number of observations 25 25 25 25 25 Non available multiples 6 6 5 5 5 Non meaningful multiples 4 3 4 7 5 Short-listed multiples 15 16 16 13 15 Minimum 1.09x 3.1x 6.0x 9.1x 2.5x 1st quartile 3.18x 11.4x 17.9x 24.6x 3.1x Median 4.15x 14.5x 26.7x 35.4x 3.3x 3rd quartile 6.15x 20.5x 41.1x 43.4x 4.3x Maximum 9.16x 33.4x 59.0x 77.1x 5.6x Mean 4.74x 16.6x 29.6x 36.9x 3.6x Std deviation as % of mean 53% 50% 56% 53% 24% Modal interval [2.72 - 5.13[ [7.4 - 14.6[ [23.3 - 41.7[ [19.2 - 35.1[ [3 - 4[ Modal interval frequency 46.7% 43.8% 43.8% 30.8% 46.7% Mode estimate 3.79x 12.2x 27.0x 35.1x 3.6x Valmetrics multiple 4.15x 16.6x 26.7x 36.9x 3.6x Multiple rating (10=highest) 6 5 8 8 5



87. Oil & Gas Equipment & Services

Manufacturers of equipment, including drilling rigs and equipment, and providers of supplies and services to companies involved in the drilling, evaluation and completion of oil and gas wells.



88. Oil & Gas Exploration & Production

Companies engaged in the exploration and production of oil and gas not classified elsewhere.





89. Oil & Gas Refining, Marketing & Transportation

Companies engaged in the refining, marketing, processing and/or transportation of oil, gas and/or refined products not classified in the Integrated Oil & Gas sub-industry. Includes diversified midstream natural gas companies facing competitive markets.



90. Packaged Foods & Meats

Producers of packaged foods including dairy products, fruit juices, meats, poultry, fish and pet foods.





91. Paper Packaging

Manufacturers of paper and cardboard containers and packaging.



92. Paper Products

Manufacturers of all grades of paper. Excludes companies specializing in paper packaging classified in the Paper Packaging sub-industry.





93. Personal Products

Manufacturers of personal and beauty care products, including cosmetics and perfumes.



94. Pharmaceuticals

Companies engaged in the research, development or production of pharmaceuticals. Includes veterinary drugs.





95. Photographic Products

Manufacturers of photographic equipment and related products.



96. Precious Metals & Minerals

Companies mining precious metals and minerals not classified in the Gold sub-industry. Includes companies primarily mining platinum.





97. Publishing

Publishers of newspapers, magazines and books, and providers of information in print or electronic formats.



98. Railroads

Companies providing primarily goods and passenger rail transportation.





99. Restaurants

Owners and operators of restaurants, bars, pubs, fast-food or take-out facilities. Includes companies that provide food catering services.



100. Semiconductor Equipment

Manufacturers of semiconductor equipment.





101. Semiconductors

Manufacturers of semiconductors and related products.



102. Soft Drink

Producers of non-alcoholic beverages including mineral waters. Excludes producers of milk classified in the Packaged Foods sub-industry.





103. Specialty Chemicals

Companies that primarily produce high value-added chemicals used in the manufacture of a wide variety of products, including but not limited to fine chemicals, additives, advanced polymers, adhesives, sealants and specialty paints, pigments and coatings.



104. Specialty Stores

Owners and operators of specialty retail stores not classified elsewhere. Includes toy stores, office supply stores and automotive retail.





105. Steel

Producers of iron and steel and related products



106. Systems Software

Companies engaged in developing and producing systems and database management software.





107. Technology Distributors

Distributors of technology hardware and equipment. Includes distributors of communications equipment, computers & peripherals, semiconductors, and electronic equipment and components.



108. Textiles

Manufacturers of textile and related products not classified in the Apparel, Accessories & Luxury Goods, Footwear or Home Furnishings sub-industries.





109. Tires & Rubber

Manufacturers of tires and rubber.



110. Tobacco

Manufacturers of cigarettes and other tobacco products.





111. Trading Companies & Distributors

Trading companies and other distributors of industrial equipment and products.



112. Trucking

Companies providing primarily goods and passenger land transportation. Includes vehicle rental and taxi companies.





113. Water Utilities

Companies that purchase and redistribute water to the end-consumer. Includes large-scale water treatment systems.



114. Wireless Telecommunication Services

Providers of primarily cellular or wireless telecommunication services, including paging services.





APPENDICES



DATA SOURCE Valmetrics uses the Compustat database (provided by Standard & Poor’s) as the source for most individual company data. Valmetrics makes no statement regarding the quality of information received from Compustat but assumes that the data are accurate, consistent and reliable. Missing data are either excluded or substituted by Valmetrics’ own data. To comply with the authorized licence granted by Standard & Poor’s, Valmetrics does not provide IMGR users with any access to Compustat content or services and only publishes its own proprietary industry valuation analysis. If you wish to access Compustat data or learn about the line of Compustat products and services, please visit www.compustat.com. DATA COVERAGE Valmetrics IMGR Standard Edition supports:

• 114 Industries: all main sub-industries - according to the Global Industry Classification Standard - are covered (see “List of Industries” page: 5). Industries related to Finance, Banking, Insurance and Real Estate are excluded in this edition.

• 27 countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, China (including

Hong-Kong), Denmark, France, Germany, India, Indonesia, Ireland, Israel, Italy, Mexico, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand, United Kingdom, USA.

DATE SCHEDULE All multiple calculations are based on historical data. The table below shows the IMGR release dates and related market and financial data schedule. IMGR SE Release

Market data

Financial data (last fiscal year available)

September 15th 05 August 31st 05 March 04 ../.. June 04../.. December 04* or later December 15th 05 November 30th 05 June 04 ../.. December 04* ../.. March 05 or later March 15th 06 February 29th 06 December 04* ../.. March 05 ../.. June 05 or later June 15th 06 May 31st 06 March 05 ../.. June 05 ../.. December 05*

(*) Closing of the fiscal year is most likely to be December.

Example: IMGR Release September 15th 05 Market capitalisation (P) August 31st 05 Earnings (E) March 04 or June 04 or December 04 P/E Ratio => August 31st 05 / most likely December 04



MULTIPLES PRINCIPLE Market multiples are valuation ratios (for example market value of a company over its net income) that are widely used by the investment community to value businesses. Assuming that industry peers all have the same valuation multiples, business appraisers can then apply the appropriate industry multiple to the company’s revenues in order to ascertain its value. There are five main multiples used in finance – EV/Sales, EV/EBITDA, EV/EBIT, PER, PBR – and many more in the industrial world (Price/Number of beds for hotels, Price/Number of tables for restaurants, Price/Number of clients, etc….). The following table shows the two types of market multiples available in the IMGR:

EV Multiples

EV / Sales EV / EBITDA EV / EBIT

Price Multiples

P/E (Price / Earnings Ratio) P/B (Price / Book Ratio)

EV = Enterprise Value

P = Price

Market capitalization + Minority interests + Financial debt - Cash & cash equivalents = Enterprise Value

Market capitalization = Price

Once you have the right multiple, you can apply it to the related company financial data requiring valuation, i.e. Sales, EBITDA, EBIT, Earnings or Shareholders’ Equity. With EV Multiples, you must deduct minority interests and the net financial debt to derive equity value. With Price Multiples you acquire direct equity value. Multiples cannot be applied to companies that do not have significant revenues (start-ups). Therefore, Valmetrics advises the use of those multiples with companies that have already recorded significant sales (for at least three years).



GLOSSARY Number of observations: number of companies that constitute the sample on which all the calculations are based. If the number of observations is insufficient, multiples calculations are considered arbitrary and are substituted by “nm” (= non meaningful). Non available (“na”) multiples: data non available in the databases. Non meaningful (“nm”) multiples: negative multiples or excluded set outliers. Minimum & maximum: respectively the lowest and highest multiple of the set. 1st, 2nd (median) and 3rd quartiles: a quartile is a statistical term describing a division of observations into four defined intervals based on the values of the data. Each quartile contains 25% of the total observations. The quartiles are determined by sorting the data from the lowest to the highest values and taking the data point at ¼ (1st quartile), the middle (median) or the ¾ of the sequence. E.g. For the median, there is an equal number of points above and below the median. Unlike the mean, the median is not influenced by outliers at the extremes of the data set. Mean: simply the sum of the values divided by the total number of items in the set. The mean is the most commonly-used measure of central tendency and is the preferred tool to calculate multiples. The mean is an example of an estimator that is the best we can do if the underlying distribution is normal. However, it lacks robustness of validity. That is, the confidence intervals based on the mean tend not to be precise if the underlying distribution is indeed not normal. Standard Deviation as a % of mean: a measure of the dispersion of a set of data from its mean. The more spread-out the data, the higher the deviation. If the standard deviation is too high, the mean multiple is not a relevant multiple. Modal interval & Mode: The modal interval is the histogram interval with the greatest density. The mode is the most frequently occurring value in the data set. As data are continuous, the mode is estimated through an interpolation calculation based on modal interval boundaries. Modal interval frequency: The number of multiples recorded within the modal interval divided by the total number of multiples. Valmetrics multiple: Valmetrics selects the best indicator among the median, the mean and the mode according to dispersion and significance tests. See the “Multiple Selection” section below for more details. Rating: Valmetrics rates (on a scale from 0 to 10, with 10 the highest) the “Valmetrics multiple” to help you select the most relevant multiple. See the “Multiple Rating” section below for more details.



MULTIPLES SELECTION A major issue in using multiples concerns the choice of a fair and robust multiple. While most appraisers defend either a buy- or a sell-side position and therefore choose the multiple according to their target price (backward valuation), Valmetrics is dedicated to finding the multiple that best represents the industry. The selection of a multiple estimator is closely linked to the assumption of the data distribution. For a Normal Distribution, the median, mean and mode are actually equivalent and the mean is a good location estimator. For skewed distributions (e.g. Lognormal) it is not obvious whether the mean, the median or the mode is the most meaningful measure. For heavy tails distributions (e.g. Gauchy), the median provides a useful measure of the typical value, whereas the mean is useless. Valmetrics does not make any distribution assumption in the IMGR Standard Edition but calculates all the main estimators – quartiles, mean and mode – that feature the shape of the distribution. The mean multiple remains the favourite estimator when the dispersion of the set (standard deviation as % of the mean) is low. If this is not the case, Valmetrics also considers the mode and the median estimators as shown in the diagram below.

Size of the set <= 5 "nm" (1) SD: Standard Deviation in % of mean(2) MF: Modal Frequency(3) MM: (Mean-Median) / Median

SD(1) < 41% Mean multiple

41% <= SD (1) < 51% 40% <= MF (2) Mode multiple

Mean mutliple

51% <= SD (1) < 61% 35% <= MF (2) Mode multiple

MM(3) <= 8% Mean multiple

Median multiple

61% <= SD (1) 30% <= MF (2) Mode multiple

Median mutliple

yes

noyes

noyes

no

yes

no

yes

yes

no

yes

no

no

yes

yes

no

CAUTION! Valmetrics selects the best estimator for each market multiple series, but to compare each multiples series (i.e. EV/Sales, EV/EBITDA, EV/EBIT, PER, PBR) make sure that you compare them on the basis of the same estimator. For example, you cannot compare an EV/sales mean multiple with an EV/EBITDA median multiple.



MULTIPLES RATING How reliable is the multiple estimator selected by Valmetrics? Is it a robust measure of the typical value? Even if calculated correctly, some multiples can not be considered robust measures because of a lack of information or analysis. That is why Valmetrics has added a multiple rating line in all tables to enable users to check the validity of the selected multiples. The rating system set up by Valmetrics does not indicate whether a multiple is right or wrong, but rather if it is robust or not. An average rated multiple can be a good and fair multiple but further analysis is required to confirm its robustness. A highly rated multiple does not necessarily require further analysis and can be used directly with a high level of confidence. Rating’s range

Valmetrics proposes a rating scale of 10, 0 being the worst rating and 10 the best. Some multiples series culminate at a maximum of 8 or 5 because of intrinsic drawbacks. Multiples Highest rate Explanations EV/Sales 8 Doesn’t take into account sales growth and operating margins EV/EBITDA 10 Robust, especially when evaluating cash flow EV/EBIT 10 Robust

PER 8 The PER is subject to accounting window dressing. Non-operating items (extraordinary and financial items) can impact the PER.

PBR 5 The PBR is more often used to monitor whether the company creates (PBR>1) or erodes (PBR<1) value than to compare valuation between peers.

Rating points

The rating system is based on a proximity analysis between the median, mean and mode estimators. If those three estimators are numerically close, then the “Valmetrics multiple” gathers a maximum of points as presented below:

• 8 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 5% • 7 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 8% • 6 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 10% • 5 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 12% • 4 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 17% • 3 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 22% • 2 points if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 27% • 1 point if Median-Mean-Mode Standard Deviation / “Valmetrics multiple” <= 40% • 1 point if Number of “Short-listed multiples” >= 30 • 1 point if Number of “nm multiples” / “Number of observations” <= 20%



ADJUSTMENTS AND POSSIBLE BIASES Valmetrics calculations are based on consistent, standardized and comparable data from company to company and from industry to industry. Even so, appraisers may have to adjust the valuation results depending of the company and the context.

• Illiquidity risk premium: to approximate the value of a privately held company, the illiquidity risk premium of the company must be taken into consideration. In the IMGR Standard Edition, Valmetrics gives market multiples which do not take into account the risk premium related to the illiquidity of a private business. Illiquidity risk premium usually ranges from a discount of 10% to 30% as compared to the public peer companies.

• Accountancy adjustment: all the market multiples are based on international accounting

standards (US GAAP / IFRS). If the company you wish to value does not use such an accounting standard, some accountancy adjustments may be necessary to match the financial data (especially EBIT, EBITDA) used to calculate the multiples.

• Strategic value: the market multiple reflects the “average” market price of the industry,

including both a fundamental value and a speculative value, but excludes the strategic value of the business (control premium, synergies with another business, etc.).

Other possible biases Date schedule: fiscal year closing dates (e.g. March ‘04, June ‘04, December ‘04) and financial data communication dates differ among companies and among countries. Valmetrics uses the last data available and mixes multiples with different date schedules. The only way to overcome this bias is to select companies that have the same date schedule and then calculate their multiples. Country / regional breakdown: two highly comparable companies in Europe and in the US may have slightly different valuation results because of macroeconomic factors inherent to the country where the company is listed (regulations, tax policy, business culture, domestic market potential, innovation dynamic, etc ….). To improve calculation accuracy, a regional analysis is required. Quasi-Equity: stock options, convertible bonds and other quasi-equity securities are financial options and should be considered in the calculation of the enterprise value. If options are in the money, they are equity, if not they are debt. Valmetrics does not take stock options into consideration and includes convertible bonds in the financial debt. Company size effect: within the same sector, there may be large companies and mid-sized companies with different fixed cost- or productivity-thresholds. Big companies are also generally less risky than small ones, and therefore should be characterized by higher multiples. IMGR does not take into account this size effect. Industry classification: Valmetrics uses the Global Industrial Classification Standards, which is considered by some research papers as the best representative of each sector. Using another industrial classification (SIC for instance) may have an impact on industry multiples.



REFERENCES AFIC, BVCA, EVCA, International Private Equity And Venture Capital Valuation Guidelines, 2005 (www.privateequityvaluation.com). Free research papers available on scholar.google.com Baker M., Ruback R. S., Estimating Industry Multiples; 1999. Harvard University Bhojraj S., Lee C. M. C., Ng D. T., International Valuation Using Smart Multiples, 2003, Johnson Graduate School of Management Bonadurer W., Valuation by Multiples, 2003, University of St. Gallen Dittmann I, Weiner C., Selecting Comparables for the Valuation of European Firms, 2005 Humboldt-Universitat zu Berlin. Fernandez P., Valuation Using Multiples. How Do Analysts Reach Their Conclusions?, 2002, IESE. Lie E., Lie H. J., Multiples Used to Estimate Corporate Value, 2002, College of William & Mary Liu, J., D. Nissim, and J. Thomas. 2000. Equity valuation using multiples. Working paper, UCLA and Columbia University. Thomas J. K., Zhang H., 2004, Another look at P/E ratios, Yale School of Management, University of Hong-Kong. Other research papers Alford, A., 1992. The effect of the set of comparable firms on the accuracy of the price-earnings valuation method. Journal of Accounting Research 30, 94-108 Bhojraj S., Lee C. M. C., Who is my Peer? A Valuation-Based Approach to the Selection of Comparable Firms, 2002, Journal of Accounting Research, Vol. 40, n°2, 407-439. Cheng, C.S.A. and R. McNamara. “The valuation Accuracy of the price-earnings and price-book benchmark valuation methods. Working paper, university of Houston, Houston, TX 1996. Leibowitz, M. L. and Krogelman, S. Inside the P/E ratio: the franchise factor. Financial Analysts Journal, pp. 43 -53. 1990 Liu, Jing, Doron Nissim and Jacob Thomas (2002b): International equity valuation using multiples, working paper, University of California at Los Angeles. Tasker, S. C. Industry preferred multiples in acquisition valuation, working paper, Cornell

industry multiplies global report

Documents

durable household

meaningful

farm machinery

wireless telecommunication

heavy electrical

electrical

integrated

internet software