Buying a regional rival: what is it worth?
Bar chart: EV/EBITDA multiples paid for similar US distributors, last three years. Values in times EBITDA. Deal A: 7.5; Deal B: 8; Deal C: 8.5; Deal D: 7.8; Deal E: 8.2.
The prompt
A US building-products distributor wants to buy a regional rival. The target earns USD 10 million of EBITDA a year and the seller asks USD 90 million. The chart below shows the multiples paid in five recent sales of similar distributors. The buyer expects cost synergies of USD 3 million a year once fully in place (half in year one), and integration will cost USD 4 million one time. Should it pay USD 90 million?
Interviewer-led: the interviewer shows the chart of recent deals and asks, in order, for the standalone value, the synergy value, the walk-away price, and a recommendation.
Practice with a partner
1. Send the interviewer link to a friend. They read the case aloud and hold the answers.
2. You open the candidate view: you see only the prompt, a timer and a notes box.
3. Speak the case out loud. Your partner shares data when you ask, then scores you with the rubric.
Interviewer view
For the person running the case
Candidate view
For the person answering the case
The exhibit
Bar chart: EV/EBITDA multiples paid for similar US distributors, last three years. Values in times EBITDA. Deal A: 7.5; Deal B: 8; Deal C: 8.5; Deal D: 7.8; Deal E: 8.2.
My notes on this case
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