Typically Nigerian Startups companies are valued for between 3x to 5x normalized EBITDA
by private equity investors. The difference in the multiple is generally the result of a variety of
characteristics specific to your business. In additon we will alaso determine the value of your
business today based on discounted future cash flows with consideration to "excess compensation"
paid to owners, level of risk, and possible adjustments for small size or lack of marketability.
Opinion letter
The enclosed Valuation Report is prepared by Meristem Capital Limited for the exclusive
and confidential use. In undertaking this engagement, we have relied on the historical financial
information provided by the management of the company. We also moderated the forecast provided by
the company and the business risk of the industry.
For our valuation, we utilized multiple of earnings and adjusted discounted EBITDA Cash
flow Models. We acknowledge that there are challenges in making forecasts, and by implication,
actual earnings and cash flows might not converge to the forecasts made and the variations can be
material.
This is an estimate only and not a binding valuation of your company or commitment to
buy.
Your Company Value using the average of 2 valuation methods is
Total future earnings plus additional compensation to founders
Calculated discount rate
Present value of today's earnings/excess compensation
Less adjustment for small size/lack of marketability
Estimated Company value (1)
Summary Analysis - Ebitda Multiplier
EBITDA
Additional Salary/Dividend to Founders
Adjusted EBITDA
Multiple (x)
Enterprise Value
Less Corporate Debt
Company Value (2) is
This information may help you analyze your financial needs. It is based on information and
assumptions provided by you regarding your goals, expectations and financial
situation. The calculations do not infer that the company assumes any fiduciary duties. The
calculations provided should not be construed as financial, legal or tax
advice. In addition, such information should not be relied upon as the only source of
information. This information is supplied from sources we believe to be reliable but
we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current
performance information. Past performance does not guarantee nor indicate
future results.
