How do recent precedent transaction multiples tend to compare to Public Comps?

Recent precedent transaction multiples are typically higher than those of public comps primarily due to the inclusion of a control premium in the transaction values. When companies are acquired, buyers often pay a control premium to gain operational control and synergy benefits from the acquisition, leading to higher multiples than what might be reflected in public market trading for similar companies.

Public comps are influenced by market perceptions and price fluctuations based on supply and demand over time, while precedent transactions reflect actual purchase prices that may include additional premiums based on strategic value or competitive positioning. This difference comes from the nature of transactions which often involve negotiations that can skew values upward compared to the more passive public market evaluations where shares trade freely. Thus, transactions that embody the control premium demonstrate that buyers are willing to pay extra for the ability to make strategic decisions and capture future cash flow improvements, solidifying the view that precedent transaction multiples are generally higher than public comps.