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Stock market multiples in the valuation of unlisted agrifood companies. || Múltiplos de mercado en la valoración de empresas agroalimentarias no cotizadas

Author

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  • Vidal García, Raúl

    (Departamento de Gestión de Empresas. Universitat Rovira i Virgili)

  • Ribal Sanchis, Javier

    (Departamento de Economía y Ciencias Sociales. Universitat Politécnica de Valencia)

  • Blasco Ruiz, Ana

    (Departamento de Economía y Ciencias Sociales. Universitat Politécnica de Valencia)

Abstract

Stock price determination is one of the main issues involved in the acquisition of companies. The transparency and high volume of the stock market make it possible to ascertain valuation multiples. In the case of privately-held agrifood companies, valuation multiples are scarce and barely representative. This paper focuses on answering whether listed stock valuation multiples of the agrifood industry can be useful for the purposes of valuing unlisted small and medium-sized companies. A study into Spanish unlisted agribusinesses is designed for several samples and accounting years. By means of a discounted cash flow model combined with bootstrap techniques, the empirical distribution of the unlisted multiples is obtained for three growth hypotheses. The results show that the stock market P/E should not be used in the valuation process of unlisted agrifood companies, whereas the stock market EV/EBITDA may be used in the valuation process of unlisted small and medium-sized agrifood companies that consistently obtain positive cash flows.|| La determinación del precio de las acciones es uno de los principales problemas en la adquisición de compañías. La transparencia y el alto volumen de la bolsa de valores permiten determinar múltiplos de valoración. En el caso de las empresas agroalimentarias privadas, los múltiplos de valoración son escasos y poco representativos. Este trabajo se centra en responder si los múltiplos de valor de las empresas de la industria agroalimentaria que cotizan en bolsa pueden ser útiles para valorar Pymes. Un estudio sobre compañías españolas agroalimentarias no cotizadas ha sido diseñado para varias muestras y años base. Por medio de un modelo de flujos de caja descontados, combinado con técnicas bootstrap, se ha obtenido una distribución empírica de los múltiplos de empresas no cotizadas para tres hipótesis de crecimiento. Los resultados muestran que el múltiplo EV/EBITDA bursátil puede utilizarse en el proceso de valoración de Pymes agroalimentarias no cotizadas que obtienen sistemáticamente flujos de caja positivos.

Suggested Citation

  • Vidal García, Raúl & Ribal Sanchis, Javier & Blasco Ruiz, Ana, 2021. "Stock market multiples in the valuation of unlisted agrifood companies. || Múltiplos de mercado en la valoración de empresas agroalimentarias no cotizadas," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 31(1), pages 198-225, June.
    • Handle: RePEc:pab:rmcpee:v:31:y:2021:i:1:p:198-225
    DOI: https://doi.org/10.46661/revmetodoscuanteconempresa.3740
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    More about this item

    Keywords

    SMEs; bootstrap; food industry; valuation multiples; Pyme; bootstrap; industria agroalimentaria; múltiplos de valoración.;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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