PEINVEST
The total value of a company, calculated as market capitalization plus net debt minus cash. Enterprise value represents the theoretical takeover price and is the basis for EV/EBITDA multiples commonly used in PE deal pricing.
Earnings Before Interest, Taxes, Depreciation, and Amortization—a widely used proxy for operating cash flow in PE valuations. EBITDA multiples are the most common valuation metric for buyout transactions, allowing comparison across companies with different capital structures.
An increase in the valuation multiple (e.g., EV/EBITDA) at which a company is valued between acquisition and exit. Multiple expansion is one of three primary value creation levers in PE, alongside revenue growth and margin improvement.
The estimated value of a company immediately before a new round of financing. Pre-money valuation is a critical negotiation point in investment transactions as it directly determines how much equity investors receive for their capital.