Valuation Case Study (ADPI) and Comparison with Fairness Opinions

One trick to hone your valuation skills is to read merger proxies. Thank you Mr. Michael Price.  Investment Bankers will do a valuation for an acquirer in a “Fairness” Opinion.  You will learn more about how Wall Street values companies than through reading the typical brokerage research report.  Investment bankers often lean heavily on multiples of comparable companies in arriving at their valuation. I wonder if the analyst arrives at a conclusion and then works backward.

Insight into other companies within an industry is another reason to read merger proxies.

Try to value American Dental Partners, Inc., ADPI, then compare your work to the investment bankers.

Go here to pick up the case study:

Good luck.

3 responses to “Valuation Case Study (ADPI) and Comparison with Fairness Opinions

  1. So Greenhill got paid $6.3m just for estimating the value of the company? Not bad work if you can get it.

  2. It’s interesting, and shows that it’s not really beyond anyone’s scope to produce something similar. It’s all just EBITDA multiples at the end of the day. It’s also interesting to see how consistently similar Greenhill’s valuation is to Merrill Lynch. I guess it’s more important to be similar than it is to be right!

    I’m a little bit confused as to why there are two sets of valuations. Were the two bankers contracted separately to render an opinion?

  3. Pingback: Birner Dental Management Services ($BDMS) update | Whopper Investments

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