The buyer's broker is using highly subjective market multiples from a tiny pool of local competitors to undervalue our logistics business. How do we use a regression-based, quantitative valuation model to prove our true enterprise value?

Question

Tyler Smith · Accepted Answer

Traditional broker multiples are often based on cherry-picked comparables and subjective adjustments that favor the buy-side. To bypass this bias, you should push for a quantitative, regression-based valuation model, similar to the Ankura framework. This methodology uses a comprehensive dataset of publicly listed companies and transaction data to build a regression model that calculates enterprise value based on objective financial inputs. By analyzing multiple variables simultaneously, such as revenue growth, operating margin, capital efficiency, and debt levels, the model minimizes subjective biases. Introduce this data-driven methodology to the broker and the buyer. Show them how your company's superior operating margins and lower capital expenditure needs place you in a different tier than the local competitors they are using as comparables. A quantitative model provides a clear, transparent interpretation of how each financial metric impacts your overall enterprise value, leaving very little room for subjective discounts. This shifts the negotiation from an emotional debate over multiples to a logical discussion about empirical data. By using a robust and scalable valuation model, you can prove that your operational efficiency merits a premium multiple, forcing the buyer's deal team to abandon their generic, local benchmarks.