Eureka Case 28 min Undergrad

Multiple or Flow

You are Íñigo Madariaga-Sáez, director of an M&A boutique in Madrid. You're advising a client who wants to buy Logística Cantábrica, a logistics operator. Your analyst brings you three valuations of the same business… and all three give different numbers. The client asks: "So how much is it worth?"

The situation

Logística Cantábrica generates €200M in EBITDA. You have three lenses to value it. The DCF (discounted cash flow) says it's worth €2,400M intrinsically, based on its own cash flows. Trading multiples (comparable public peers) trade at 11× EBITDA → €2,200M. Transaction multiples (precedent deals, which already include a control premium) sit at 13× → €2,600M.

None of the three is "the truth." The DCF is intrinsic but sensitive to its assumptions. Trading multiples reflect market sentiment and demand peers that are genuinely comparable. Transaction multiples run higher because they bake in the control premium —something you should only pay if you're going to capture synergies that justify it. The classic mistake is picking the method that gives you the number you already wanted.

Your job in this case: see how each method and each multiple move the value, reconcile all three, and recommend a price. The question isn't "multiple or flow?" —it's how to triangulate them and explain why they differ.

The decision

What value do you recommend to the client?

  • A · Value using transaction multiples (≈14×)
  • B · Triangulate DCF + comparables (≈€2,400M)
  • C · DCF only (≈€2,400M, ignore the market)

The rest of the case is locked

The data, the calculations, the decision itself and what happens next open with your institution's access code.

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