Determinants of Valuation Multiples in European M&A Transactions

This thesis investigates the determinants of valuation multiples in mergers and acquisitions, with a focus on EV/EBITDA as a key measure of transaction value. The empirical analysis is based on a sample of completed M&A transactions involving Western European target firms. After constructing and cleaning the dataset, regression models are employed to examine the relationship between valuation multiples and firm-specific characteristics, including size (proxied by revenue), leverage, and profitability. The findings indicate that leverage has a positive and statistically significant effect on valuation multiples, while firm size, measured as the natural logarithm of revenue, shows a negative relationship. Profitability, measured by return on invested capital, does not appear to be a significant determinant. Additional robustness checks, including outlier treatment, confirm the stability of the results.