The question “how much is my company worth” has no single answer because a company’s market value in an M&A transaction is the result of the intersection of three dimensions: intrinsic value (what the company will generate), relative value (what comparable recent transactions pay), strategic value (what the company is specifically worth to a determined buyer). An experienced advisor evaluates all three, because often the highest of the three translates into the final closing price — and ignoring even one means leaving value on the table.
Intrinsic value is calculated with DCF (Discounted Cash Flow): free cash flow generation is projected over the next 5-7 years, discounted at the company’s cost of capital, terminal value added. It is the most rigorous method but also the most sensitive to assumptions: a half-point variation in WACC or 2% on perpetual growth rate can change value by 15-25%. For the Italian mid-market, the typical WACC range is 8-12%, terminal growth 1-2.5%.
Relative value uses market multiples applied to company metrics — typically EV/EBITDA, EV/EBIT, EV/Sales — compared with recent comparable transactions in the sector. For the Italian mid-market, the EV/EBITDA multiple range varies significantly by sector: 4-6x for commodity services, 6-9x for specialty manufacturing, 9-14x for B2B software and premium healthcare, 15-25x for fintech and AI scale-ups. Relative value is the defensible baseline in negotiation.
Strategic value, finally, is the component that varies from one buyer to another: what the company is worth to THAT specific acquirer. An industrial buyer seeking geographic complementarity may pay a 30-50% premium above intrinsic value; a fund seeking platform deal to build a platform may pay 20-40% premium on the single target. An advisor’s ability to bring multiple buyers with different strategic value profiles into competitive auction is what allows capturing this premium rather than leaving it to the buyer.
