The buyer's broker is using simple industry multiples to value our company, but we believe our superior capital efficiency and automated operations deserve a premium. How do we use a regression-based model like the Ankura framework to prove our valuation is mathematically correct?

Question

Tyler Smith · Accepted Answer

Simple industry multiples are a blunt tool that penalizes high-performing companies. If your business runs at double the profitability of your peers because of smart automation, a standard market multiple approach will systematically undervalue your operational excellence. You need a more sophisticated, data-driven methodology to force a fair valuation.

You should introduce a quantitative, regression-based valuation model similar to the Ankura framework. This model uses a comprehensive dataset of publicly traded peers and comparable transactions to isolate specific financial drivers, such as revenue growth, EBITDA margin, and capital efficiency. By running a regression analysis, you can mathematically prove how much each percentage point of margin expansion actually contributes to enterprise value.

Use this statistical data to demonstrate that your business is not a standard industry average company. Show that your superior asset-to-capital conversion rate places you in the top decile of your sector. When you present a buyer with a regression model that correlates premium margins with premium multiples, you shift the negotiation from a subjective argument to a mathematical certainty. This positions your operational efficiency as a highly valuable asset, justifying a premium multiple that standard valuation approaches completely miss.