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| Businesses for sale | Private Company Price IndexThe Private Company Price Index (PCPI)
Every quarter, the Business Sale Report will summarise the BDO Stoy Hayward Private Company Price Index (PCPI). The PCPI tracks the relationship between the current four month rolling average FTSE Non-Financials price earnings ratio (p/e) and the p/es currently being paid on the sale of private companies. The FTSE Non-Financials p/e is calculated from the p/es published in the FT. The private company p/e is calculated from publicly available financial information on deals that complete in the quarter.
As private companies are generally owner-managed, reported or disclosed profits tend to be suppressed by various expenses that may be non-recurring under a new owner. This will have been factored into the price the purchaser paid, but may not be reflected in the profits declared to the public. The effect of this is that the p/e paid as calculated from the publicly available information may be over stated. The PCPI tracks the discount between how public and private companies are being valued. This discount means valuation techniques can be used that are only relevant to public companies and apply them to private companies in the same sector.
The PCPI is generally recognised as the most authoritative source on private company values by practitioners in the market, including the Inland Revenue and leading accounting firms. These quarterly updates are available in the subscribers section Other areas covered: The up to date Private Company Price Index Summary of deal activity Study of M & A activity in a certain market sector
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16 May 2008
Reuters, the news and information group is to be bought out by Thomson, the Canadian financial data ...[more]
14 May 2008
Anite, the UK-based IT solutions company, is currently undergoing a strategic review of its public s...[more]
12 May 2008
Natalie Massenet, founder of the online fashion retail business, Net-a-Porter.com, is thought to hav...[more]
09 May 2008
Mobile bulk messaging group, Dynmark, is undergoing a review of its business which may lead to a sa...[more]
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