Managing Director Charles Sapnas is featured in the article “EBITDA on Steroids” in the June 2019 edition of Private Debt Investor. The article explores the controversy surrounding EBITDA addbacks in deal agreements.
In some cases, Sapnas suggests general partners might think about only using an EBITDA multiple as a secondary tool when it comes to valuing a business. He said, “If you have to make a lot of historical changes, you might apply a discounted cashflow [as a primary method] and use the EBITDA multiple as a secondary tool. The more adjustments you have to make, the more questionable it is that historical EBITDA is the best valuation metric.”
Private Debt Investor subscribers can read the full article here: EBITDA on Steroids