The buyer is using three highly distressed, low-multiple transactions from their own database as comps to value our tech-enabled manufacturing business. How do we use the Market Approach under IVS 105 to force them to use a broader, statistically valid set of industry comps?

Question

Tyler Smith · Accepted Answer

When a buyer cherry-picks distressed comparable transactions to lower your valuation, they are violating the core principles of the Market Approach under IVS 105. Under these international standards, comparable transactions must be truly representative of active, orderly market conditions, not forced liquidations or distressed fire sales. To fight back, you must present a statistically robust, data-driven market analysis.

First, reject their limited dataset and insist on using a comprehensive, third-party source like Capital IQ to pull a broader peer group of publicly listed and recently sold private companies. Work with a valuation specialist to build a regression-based model that plots enterprise value against key metrics like EBITDA margin, revenue growth, and capital efficiency. This quantitative approach removes the subjective bias of cherry-picking.

Second, use this regression model to demonstrate where your business actually sits relative to the market. If your tech-enabled manufacturing operations generate higher margins and have lower capital expenditures than their distressed comps, the regression line will show you deserve a premium multiple.

Third, document your operational superiority using your EOS data. Show the buyer your historical scorecard to prove your consistent delivery metrics and capacity utilization. This operational transparency, combined with a compliant IVS 105 valuation, makes it incredibly difficult for the buyer to defend their lowball comps. You turn a subjective argument about what your business is worth into a clear, mathematical reality.