Transaction-Focused Business Valuation
SEVN Advisory estimates what a privately held business may command in a transaction through the lens of likely financial and strategic buyers.
Request a Valuation ConsultationWhat Is a Transaction-Focused Business Valuation?
A transaction-focused business valuation estimates what a privately held business may command in a sale, recapitalization, partner buyout, or evaluation of an unsolicited offer.
SEVN Advisory considers management-provided financial information, normalized earnings, business characteristics, risk, and relevant market evidence to develop an Indicative Transaction Value Range for transaction planning, pricing, and negotiation.
Why Business Valuation Matters
A realistic view of value helps owners evaluate their options and approach a potential transaction from a more informed position.
Set Realistic Expectations
Establish an informed value range before beginning a sale or recapitalization process.
Evaluate Offers in Context
Compare proposed pricing with the company’s financial performance, risk profile, and relevant market evidence.
Prepare for Pricing and Negotiation
Understand the value drivers, assumptions, and risks that may influence transaction price and structure.
How SEVN Advisory Can Help
We combine financial analysis, business context, market evidence, and buyer perspectives to estimate transaction value and explain what is driving it.
- 01
Define the Transaction Context
Establish the valuation date, transaction objectives, business model, competitive position, industry outlook, and likely buyer universe.
- 02
Assess Financial Performance and Risk
Review revenue, growth, margins, normalized earnings, selected operating KPIs, concentration, owner dependence, management depth, and other factors that may influence buyer interest.
Management-provided normalization adjustments are considered for valuation purposes but are not independently tested.
- 03
Apply Relevant Valuation Methods
Select the methods most relevant to the company, available information, and likely buyers. These may include transaction or public-company comparables; SDE, EBITDA, revenue, or industry-specific multiples; income approaches; and asset-based methods when appropriate.
- 04
Develop and Explain the Range
Reconcile the selected methods into an indicative low, base, and high enterprise value range.
When appropriate, prepare a preliminary equity value range using client-provided cash and debt balances. Explain the principal assumptions, value drivers, risks, and buyer considerations affecting the range.
Why Choose SEVN Advisory
Our team brings experience across investing, transaction advisory, financial analysis, valuation, and operations.
Buyer-Oriented Perspective
We frame value through the lens of how likely financial and strategic buyers evaluate privately held businesses.
Relevant, Tailored Analysis
We select the earnings measures, operating KPIs, market evidence, and valuation methods most relevant to the company and its likely buyer universe.
Clear, Practical Findings
We explain the estimated range, methods, assumptions, value drivers, and risks—not simply a multiple or standalone number.
What You Receive
A concise valuation report and findings discussion designed to explain the estimated range and what is driving it.
Indicative low, base, and high enterprise value range
Preliminary equity value range when appropriate
Selected valuation methods and relevant available market evidence
Key assumptions, sensitivities, value drivers, and risks
One concise written valuation report
Findings discussion with the SEVN Advisory team
Typical Engagement
7–10
Business Days$500K+
Minimum$100K+
MinimumMost straightforward engagements are completed within 7–10 business days after all requested information is received and the management discussion is completed. Complex or multi-entity engagements may require 10–15 business days.
Both financial criteria generally apply. There is no maximum company size.
Scope Note
The analysis relies on management-provided information and does not include Financial Due Diligence, audit or assurance procedures, or independent verification. It provides an indicative transaction value range for transaction planning—not a certified appraisal, fairness or solvency opinion, valuation for tax, litigation, financial reporting, lender or other formal reliance purposes, or a guarantee of transaction price.
Business Valuation FAQs and Key Terms
Answers to common questions about transaction-focused business valuation and the financial measures buyers use.
What is SDE, and when is it used?
Seller’s Discretionary Earnings, or SDE, estimates the earnings available to one owner-operator before that owner’s compensation and benefits, interest, income taxes, depreciation, amortization, and qualifying discretionary or nonrecurring expenses.
SDE is commonly used for smaller, owner-operated businesses. It is not a standardized measure, and buyers assess the support for proposed adjustments.
What are EBITDA and Adjusted EBITDA?
EBITDA means earnings before interest, taxes, depreciation, and amortization.
Adjusted EBITDA modifies EBITDA for specified nonrecurring, nonoperating, or owner-related items to estimate normalized ongoing performance. Adjusted EBITDA has no universal definition, and buyers may reject adjustments that are unsupported or unlikely to continue.
What is the difference between enterprise value and equity value?
Enterprise value represents the estimated value of the operating business before adjustments for cash, debt, debt-like items, and certain nonoperating assets or liabilities.
Equity value is the estimated amount attributable to the owners after those adjustments.
What valuation methods are used?
Depending on the business and available information, the analysis may use market, income, or asset-based approaches and relevant buyer-economics cross-checks.
The selected methods reflect the company’s earnings profile, business characteristics, available data, and likely buyer universe.
Why can companies with the same EBITDA have different values?
Buyers consider more than current earnings. Growth, recurring revenue, customer concentration, margins, management depth, owner dependence, capital requirements, industry outlook, and strategic fit can produce materially different valuations.
What information is needed, and how long does the process take?
The analysis typically requires three years of financial statements, current year-to-date or trailing-twelve-month results, management’s proposed adjustments, selected operating KPIs, cash and debt balances, and a management discussion.
Most straightforward engagements are completed within 7–10 business days after the requested information is received.
Is the estimated range the price the business will sell for?
No. It is an informed, indicative estimate and not a guaranteed sale price.
Actual pricing may change based on financial diligence, buyer competition, financing, working capital, cash, debt and debt-like items, deal structure, market conditions, and negotiation.
Related Services
Know Your Range Before You Go to Market.
Understand what informed buyers may support—and what is driving value—before entering a transaction.
Request a Valuation Consultation