Introduction
Valuing companies is central to mergers and acquisitions—and a key part of any M&A interview. Interviewers want to see that you understand the major valuation methods, when to use them, and how to adjust for transaction-specific dynamics like synergies and control premiums. This blog outlines the core M&A valuation techniques and how to approach them in interviews.
Lets take a look at the different valuation methods;
- DCF (Discounted Cash Flow): Best for stable, cash-generative businesses.
- Comparable Company Analysis (Trading Comps): Uses public company data to estimate value.
- Precedent Transactions: Looks at similar historical M&A deals.
- LBO Analysis: Used to understand floor valuation based on financial sponsors.
- Synergies and Premiums: Discuss how strategic buyers may pay a premium due to revenue or cost synergies.
Top Interview Tip: Explain why a method is appropriate, not just how it works.
Conclusion
A great M&A candidate doesn’t just list methods—they can explain valuation in context. Circle Square gives you access to role-specific preparation and insight into what types of deals our clients focus on, so you can tailor your answers and stand out.
