Lumpy earnings valuation

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by a searcher from University of Connecticut
in Grand Rapids, MI, USA

4yrs ago

Lumpy earnings valuation

How have people thought about the valuation of construction-related services businesses with lumpy earnings?

Multiple on average of three years? Contingent purchase price based on future revenue? Have them carry a larger seller note? Stop, do not pass go?

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reply by a professional 4yrs ago
from Harvard University in Atlanta, GA, USA

Yes. Use an average, get a larger seller note, and be sure you account for how much of the buying decision by customers is based on the owner or team members who you may or may not be able to keep!

reply by a searcher 2yrs ago
from IESE Business School in Johannesburg, South Africa

Thank you for posting the responses here have been helpful. Interesting I am looking at a deal with two equal division but one of them are a more porject based lumpy services business.