I have seen some companies in B2B services that have annual contracts. Is it reasonable for a seller to try to create a valuation based on future (contracted) performance? If so, how could that be structured?

- Revenue (contracted) increase from now to end of year, as an example let's say 25%.

- EBITDA (forecasted) increase from now to end of year, as an example, let's say 40%.

My initial thought would be to do create an offer based on TTM EBITDA (that is what I have seen as somewhat of a standard on many services transactions). Could I include an additional earn out to get close to forecasted EBITDA?

I have seen a few deals that have aggressive pro forma numbers not in line with historical (actual) financials. I am thinking in a case like this that due diligence (including a QoE) will uncover the actual contracts (allowing me to eliminate any unsubstantiated forecasted improved performance).

Any recommendations on structuring? Or other general concerns? For assumptions, let's pretend this is in the $7-15M price range.