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If the paper were valued at 10 times its current cash flow, a possible sale multiple, it would cost $2 billion.
The financial details were not disclosed however Companies House filings show that Twofour made profits of about £3m in 2012 – and it is thought to be on track for a better performance this year – which at a typical sale multiple of about nine-times earnings would put a value of about £30m on the deal.
While previous speculation framed the sale multiple of 25 times EBITDA ($400 million), it finally sold for around 23 times.
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Similar(55)
Nevertheless, Tonkin pegged sale multiples in the vegan beverage space at a healthy 2.5x revenue.
The company's price-to-sales multiple in January was 0.59.
Starmine data show the average sales multiple for listed software companies is 3.5.
For most software companies and other fast-growing concerns, he looks at the price-to-sales multiple.
At his new target, the company would trade at a 50percentt premium to the shares of peer companies like JDS Uniphase, based on its price-to-sales multiple.
One way to gauge whether a company is relatively pricey is to compare its price-to-sales multiple to those of other companies in the same industry.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com