M&A and Dealmaking: The Vault Series

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M&A and Dealmaking

A Practical Guide to Tech M&A Valuation

26 February, 2020

The theoretical metrics of company valuations are well known: compare similar public companies, review precedent M&A transactions and throw in a discounted cash flow (DCF) model for good measure. Then how does this theoretical valuation model account for Facebook's acquisition of WhatsApp in 2014 for $19 billion when WhatsApp had $20 million in revenue, a 950x revenue multiple? Why is Airbnb worth $31 billion, which is more than Hilton at $27 billion. Why is Uber worth $72 billion, which is more than GM at $58 billion?