We are preparing for a sale and want to use a multi-method valuation approach under IVS 105 to defend a premium valuation, but our brokers only want to look at local transactional multiples. How do we build a robust, defensible valuation model using both market and income approaches?

Question

Tyler Smith · Accepted Answer

Brokers often default to simple transaction multiples because they are easy to explain, but this approach frequently leaves money on the table. If your business has unique proprietary technology, high operating leverage, or highly predictable recurring revenue, a simple local multiple will fail to capture your true economic value. To defend a premium price, you must implement a multi-method valuation approach under the International Valuation Standards, specifically IVS 105. This requires combining the market approach with the income approach. Under the income approach, build a detailed discounted cash flow model that projects your future earnings based on your current operational efficiency. Use your EOS Scorecard historical data to prove the predictability of your margins and conversion rates. Under the market approach, expand your data set beyond local transactional multiples. Use regression-based models, such as the Ankura quantitative framework, which analyze a broader set of public comparable companies to assess how financial metrics like revenue growth, size, and operating leverage impact enterprise value. By presenting a valuation that is backed by both discounted future cash flows and advanced regression data, you force the buyer to engage with your business's actual economic performance. This multi-method defense takes the subjectivity out of the negotiation and proves that your business deserves a premium multiple.