Rule of Thumb for Private Equity Valuations and Buyouts
Nov 04
Private Equity, Valuation 10x, EBITDA, Growth, Private Equity, Rule of Thumb, Valuation No Comments
Private equity buyout valuations have historically averaged about 4 to 5 times EBITDA. In recent years (2005 and beyond), private equity buyout valuations have been closer to 10x EBITDA. Insiders agree that this will limit Private Equity (PE) returns to mid- to low teens in sharp contrast to their historical 30% IRRs.