Section 5.10 · multiple build-up and EV bridge
Valuation
A multiple assembled from stated adjustments, applied to normalised EBITDA, then bridged from enterprise value to equity value. Three prices come out: opening, target, maximum.
Selected multiple
3.4×
Range 3.0× to 3.8×
Enterprise value
£1,989,680
585,200 × 3.4
Equity value
£1,597,680
Range £1,363,600 to £1,831,760
Asking price
£1,850,000
15.8% above base equity value
No comparable transactions are quoted anywhere in this valuation. The base multiple comes from an operator-maintained assumption table keyed on sector and EBITDA band, versioned and dated. The platform does not invent comparable deals, and it does not cite a comparable it cannot evidence.
Multiple build-up
| Component | Turns | Basis |
|---|---|---|
| Sector and size base | 3.40 | Facilities management, normalised EBITDA £500k to £750k band. Assumption table v3, dated 1 July 2026. Assumption |
| Recurring revenue at 68% | +0.35 | Contracted share materially above the sector norm used in the table |
| EBITDA CAGR 15.28% | +0.20 | Growth in each of three years, ahead of revenue growth |
| Customer concentration 18.4% | −0.30 | Largest customer above the 20% warning line on a top-five basis of 46.1% |
| Normalised margin 14.2% | +0.10 | Modestly above the band assumption of 13% |
| Owner dependency MODERATE | −0.20 | Owner leads all tendering. Replacement cost is already inside EBITDA, this is the residual transition risk. |
| Tender and retender exposure | −0.15 | Framework retender in 2027 on 10.5% of revenue, win rate not evidenced |
| Selected multiple | 3.40 | Adjustments net to zero. The base is not a coincidence, it is the outcome. |
Every adjustment names the measured fact that produces it. An adjustment with no measured fact behind it cannot be entered.
Enterprise value to equity value
| Step | GBP | Provenance |
|---|---|---|
| Normalised EBITDA | 585,200 | Calculated |
| × selected multiple 3.4 | 1,989,680 | Calculated |
| Enterprise value | 1,989,680 | |
| Add cash at bank | +145,000 | Filed |
| Less bank loans | −312,000 | Filed |
| Less hire purchase obligations | −88,000 | Filed |
| Less dilapidations provision | −35,000 | Platform estimate |
| Less abnormal working capital | −42,000 | Calculated |
| Less deferred capex | −60,000 | Platform estimate |
| Equity value | 1,597,680 |
Two bridge lines are estimates, not evidence. Dilapidations at £35,000 and deferred capex at £60,000 total £95,000. Both are named on the overview as open gaps. A survey and a fleet schedule would replace them with measured numbers.
Valuation range
| Case | Multiple | Enterprise value | Bridge | Equity value | Driver |
|---|---|---|---|---|---|
| Low | 3.0× | 1,755,600 | −392,000 | 1,363,600 | Concentration and tender risk price harder |
| Base | 3.4× | 1,989,680 | −392,000 | 1,597,680 | Build-up as stated above |
| High | 3.8× | 2,223,760 | −392,000 | 1,831,760 | Expiry ladder healthy, successor named |
The asking price sits above the high case. Reaching it would need every open gap to resolve favourably and the concentration adjustment to disappear, which the evidence does not support.
Price recommendation
Opening offer
£1,380,000
86.4% of base equity value. Leaves room for the two challenged add-backs to be argued.
Target price
£1,560,000
97.6% of base equity value. Base IRR 65.3%, DSCR 1.78×, payback 2.6 years.
Maximum price
£1,740,000
The price at which year-one DSCR falls to the 1.5× mandate floor. Above this the deal fails the mandate.
Recommendation: ATTRACTIVE ONLY BELOW £1,740,000.
Next best action: obtain current-year management accounts and a written statement of the owner's duties, then open at £1,380,000 with the two challenged add-backs itemised in the offer letter.
The maximum is set by debt service cover, not by the valuation range and not by the return hurdle. At a 3.4× entry multiple the modelled IRR clears 25% at any fundable price, so it never binds. At £1,850,000 the year-one DSCR is 1.37×, below the 1.5× requirement, and the deal does not qualify however attractive the business is. Detail on the funding screen.
What moves the maximum
| Change | Normalised EBITDA | Maximum price | Would it reach the asking price |
|---|---|---|---|
| As modelled | 585,200 | 1,740,000 | No |
| Both challenged add-backs accepted in full | 605,200 | 1,780,000 | No |
| Owner replacement cost not required | 657,200 | 1,882,000 | Marginally, and only if the buyer works full time |
| Vendor note increased to £500,000 | 585,200 | 1,917,000 | Yes, if the seller takes paper |
| Multiple at the high case of 3.8× | 585,200 | 1,740,000 | No — cover binds, not the multiple |
The vendor note is the productive lever, not the price. A seller who takes £500,000 as paper rather than cash can be paid the asking price without breaching the cover floor, and carries part of the risk in exchange. The owner replacement row also reaches it, but only by requiring the buyer to replace the owner personally, which contradicts the mandate's stated preference for owner independence.
AcquiScope produces analysis and modelling, not regulated investment advice. Multiples, bridge lines and prices shown belong to an invented business and are illustrative of the engine's output. Any real valuation requires independent verification and professional due diligence.