Identifying the Peer Group of Comparable Companies
In your hypothetical comparable companies analysis, begin by searching for competitors of your target company, Centennial Brewing. This will involve searching through selected industry reports, analysis reports, prospectuses, and financial reports for similar companies in the industry. You may also want to look at proxy statements for recent merger and acquisition transactions for companies in Centennial’s industry and sector. Keep in mind, however, that while the proxy statements will provide good information on comparable companies, the price that an acquirer pays often includes a premium, so it will be higher than the value of the company without the premium. From your research, pretend you came up with the initial listing of comparable companies that follow.
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List of Potential Comparable Companies |
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Company |
Share Price |
Equity Value |
Enterprise Value |
LTM Sales |
|
King Brew |
$84.14 |
$369.01 |
$401.01 |
$481.70 |
|
Hoppy Brothers |
$45.91 |
$179.48 |
$206.77 |
$175.90 |
|
Malted Supply |
$65.03 |
$62.15 |
$68.98 |
$59.80 |
|
Heart River |
$51.59 |
$39.03 |
$44.32 |
$37.60 |
|
Brew-To-You |
$78.28 | |||