Private Equity Valuation: A Case Study

Abstract

This thesis presents a case study of a financial valuation conducted on a large, privatively owned corporation. Accurate valuations in the business world are one of the most integral aspects to the livelihood of any company. The concept of valuation seems simple: a single price that serves as the economic value of a company. With the current state of the business world approaching that of an efficient market, where all information is given to all players in real time, the most elementary valuation of a public company can be as easy as looking at that company’s market capitalization. However, with the extreme lack of information that exists with private firms, the process of valuing these companies is quite difficult, including as much art as science. For that reason, this project was undertaken to study and learn the various intricacies of completing private equity valuations.