Managed IT and cybersecurity provider for mid-market professional firms. 78% of revenue sits under multi-year managed-service contracts, the balance is project and hardware work. Illustrative sample, not a real company.
Blend of the methodologies above; weights per the methodology table.
Free cash flows are projected over the forecast window and discounted at the WACC below; a terminal value captures the business beyond the explicit forecast. Cash and other non-operating items are added to enterprise value and debt and other claims are deducted to arrive at equity value.
| $M | |
|---|---|
| PV of forecast free cash flows | 11.5 |
| PV of terminal value | 20.7 |
| Enterprise value | 32.3 |
| Add: cash & equivalents | 2.5 |
| Less: total debt | (1.4) |
| Equity value | 33.4 |
| 2026E | 2027E | 2028E | 2029E | 2030E | |
|---|---|---|---|---|---|
| Revenue | 24.0 | 25.9 | 27.8 | 29.8 | 31.7 |
| % growth | – | 8.0% | 7.5% | 7.0% | 6.5% |
| EBITDA | 4.0 | 4.3 | 4.6 | 4.9 | 5.2 |
| % margin | 16.5% | 16.5% | 16.5% | 16.5% | 16.5% |
| Less: D&A | (0.6) | (0.6) | (0.7) | (0.7) | (0.8) |
| EBIT | 3.4 | 3.6 | 3.9 | 4.2 | 4.4 |
| Less: cash taxes | (0.7) | (0.8) | (0.8) | (0.9) | (0.9) |
| NOPAT | 2.7 | 2.9 | 3.1 | 3.3 | 3.5 |
| Add: D&A | 0.6 | 0.6 | 0.7 | 0.7 | 0.8 |
| Less: capital expenditure | (0.7) | (0.8) | (0.8) | (0.9) | (0.9) |
| Unlevered free cash flow | 2.5 | 2.7 | 2.9 | 3.1 | 3.3 |
Value is estimated by applying the median peer multiple to the subject's financials. Peers are matched on NAICS industry and revenue size; a private-company liquidity discount is applied relative to listed peers.
| Peer | EV / Revenue | EV / EBITDA | Source |
|---|---|---|---|
| CDW Corporation | 1.4× | 13.8× | – |
| Insight Enterprises | 0.6× | 11.2× | – |
| ePlus inc. | 1.1× | 9.6× | – |
| Computacenter plc | 0.4× | 8.9× | – |
| Converge Technology Solutions | 0.5× | 8.4× | – |
| Median (meaningful multiples) | 0.6× | 9.6× |
Medians taken over peers with meaningful multiples; non-meaningful and outlier observations excluded.
Value is estimated using actual M&A deal multiples for comparable businesses. The median is applied to the subject's earnings; deal targets are anonymized where disclosure is restricted.
| Target | Acquirer | EV / Rev. | EV / EBITDA | Basis | Date | Source |
|---|---|---|---|---|---|---|
| IT / Managed Services Company | Private Buyer | 1.4× | 8.9× | EBITDA | 2024-09 | VA database |
| IT / Managed Services Company | Private Buyer | 1.3× | 8.2× | EBITDA | 2024-03 | VA database |
| IT / Managed Services Company | Private Buyer | 1.6× | 9.4× | EBITDA | 2023-11 | VA database |
| IT / Managed Services Company | Private Buyer | 0.9× | 7.8× | EBITDA | 2023-06 | VA database |
| IT / Managed Services Company | Private Buyer | 1.4× | 8.6× | EBITDA | 2025-01 | VA database |
| Median | 1.4× | 8.6× |
Engines are blended by weight to produce the headline range. Weights are set by data quality, peer availability, and engine fit for the industry; the blended mid is the weighted average of each engine's mid.
| Methodology | Weight | Implied value | Notes |
|---|---|---|---|
| Discounted Cash Flow (DCF) | 40.0% | 33.4 | 5-year projection at 11.8% WACC, 2.5% terminal growth |
| Comparable Companies (CCA) | 30.0% | 31.2 | Median 0.6× EV / Revenue across 5 included peers |
| Precedent Transactions | 30.0% | 34.7 | Median 8.6× EV / EBITDA across 5 included deals |
| Blended equity value | 100.0% | 33.1 |
Each case re-runs the valuation on its own set of assumptions (conservative, base and optimistic), changing growth, margin and the discount rate. The base case is the concluded value. In the conservative case the value does not fall below the going-concern asset floor of $5.6M.
| Bear | Base | Bull | |
|---|---|---|---|
| Revenue growth (Y1) | 8.5% | 8.5% | 8.5% |
| EBITDA margin (terminal) | 16.5% | 16.5% | 16.5% |
| WACC | 11.8% | 11.8% | 11.8% |
| Equity value | 28.4 | 33.1 | 38.7 |
| Change vs. base | -14% | – | +17% |
What the business is worth on its assets alone: a downside anchor. Liquidation assumes a forced sale of working capital and hard assets; adjusted book an orderly wind-down at market value; going concern the replacement cost of the asset base. $ in millions (USD) unless otherwise noted.
| $M | |
|---|---|
| Cash & equivalents | 2.54 |
| Adjusted receivables | 2.88 |
| Adjusted property, plant & equipment | 1.22 |
| Total adjusted assets | 6.63 |
| Less: total liabilities | (3.50) |
| $M | |
|---|---|
| Liquidation value | 3.13 |
| Adjusted book value | 5.62 |
| Going-concern floor | 5.62 |
The concluded equity value sits above the going-concern asset floor, confirming the operating thesis adds value over the assets alone.
The figures below are as provided by the client and used in the analysis. $ in millions (USD) unless otherwise noted; values recompute from the source documents and may differ by rounding.
| Line item | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|
| Revenue | 22.1 | 19.4 | 16.8 |
| Cost of Goods Sold | 12.9 | 11.4 | 10.1 |
| Gross Profit | 9.2 | 8.0 | 6.7 |
| Operating Expenses | 6.1 | 5.2 | 4.5 |
| EBITDA | 3.6 | 3.2 | 2.6 |
| Depreciation & Amortization | 0.6 | 0.5 | 0.4 |
| Operating Income | 3.1 | 2.7 | 2.2 |
| Interest Expense | 0.1 | 0.1 | 0.2 |
| Income Tax | 0.6 | 0.5 | 0.4 |
| Net Income | 2.3 | 2.0 | 1.6 |
| Line item | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|
| Cash & Equivalents | 2.5 | 1.8 | 1.2 |
| Accounts Receivable | 3.0 | 2.7 | 2.3 |
| Other Current Assets | 0.3 | 0.3 | 0.3 |
| Total Current Assets | 5.9 | 4.7 | 3.7 |
| Property, Plant & Equipment | 1.6 | 1.4 | 1.2 |
| Intangible Assets | 0.4 | 0.5 | 0.7 |
| Goodwill | 1.2 | 1.2 | 1.2 |
| Total Assets | 9.1 | 7.8 | 6.8 |
| Accounts Payable | 1.3 | 1.2 | 1.0 |
| Accrued Liabilities | 0.8 | 0.7 | 0.6 |
| Short-Term Debt | 0.4 | 0.4 | 0.4 |
| Total Current Liabilities | 2.5 | 2.3 | 2.0 |
| Long-Term Debt | 1.0 | 1.4 | 1.8 |
| Total Liabilities | 3.5 | 3.7 | 3.8 |
| Total Equity | 5.6 | 4.2 | 3.0 |
| Line item | FY 2025 |
|---|---|
| Net Income | 2.3 |
| Depreciation & Amortization | 0.6 |
| Capital Expenditures | (0.6) |
| Debt Repayment | (0.4) |
| Net Change in Cash | 0.8 |
| Changes in Working Capital | (0.2) |
| Dividends Paid | (0.9) |
| Net Cash from Financing | (1.3) |
| Net Cash from Investing | (0.6) |
| Net Cash from Operating | 2.7 |
Owner-specific and non-recurring items are added back to reported EBITDA to reflect the earnings a buyer would acquire.
| $M | |
|---|---|
| Reported EBITDA | 3.6 |
| Add: accepted normalization add-backs | 0.3 |
| Normalized EBITDA | 3.9 |
The valuation reflects the assumptions stated above and the data provided. The following factors could move the concluded range.
| Factor | Severity | Assessment |
|---|---|---|
| Customer concentration | Note | Not assessed: no customer breakdown was provided. A buyer will ask for revenue by customer. |
| Earnings quality | Note | Add-backs raise EBITDA by 7%, from $3.6M reported to $3.9M normalized. Each add-back is listed with its source in the normalization exhibit. |
| Leverage | Note | Cash exceeds debt by $1.1M, so leverage does not constrain the value. |
| Litigation and claims | Note | Not assessed: no legal documents were provided and no claims were entered. |
| Revenue track record | Note | Across the 4 years reported, revenue went from $14.2M to $22.1M (+15.9% a year). |
| Margin durability | Note | The EBITDA margin is 17.7% today (normalized EBITDA); the forecast assumes 16.5%. The forecast keeps the margin close to today's level. |
| Information quality | Note | Not assessed: the documents do not say whether the statements were audited, and no consistency checks were recorded. |
| Private-company liquidity | Note | A private-company discount is applied to listed-peer multiples; its size is a judgment. |
Figures are stated on the basis declared in each page header. Values recompute from rounded published inputs and may differ ±0.1 versus the memo. Net debt adjusts enterprise value to equity value.
| Document | Period | Status | Source |
|---|---|---|---|
| Kestrel_FY2023-2025_financials.xlsx | FY2023 – FY2025 | Parsed | Client upload |
| Managed_services_contract_schedule.pdf | As of Dec 2025 | Parsed | Client upload |
| Federal_tax_returns_2023-2024.pdf | FY2023 – FY2024 | Reviewed | Client upload |
| Payroll_and_headcount_summary.xlsx | FY2025 | Parsed | Client upload |
| Input | Source |
|---|---|
| Historical financials | Client-provided statements |
| Peer multiples | Public market data as of the valuation date |
| Precedent deals | Value Alpha transaction database |
| Cost of capital | Value Alpha WACC build-up (risk-free + equity risk premium + size & industry adjustments) |
The following values were entered or adjusted by the preparer and are not taken directly from the uploaded documents.
| Field | Period | Was | Now | Date |
|---|---|---|---|---|
| Owner compensation | FY2025 | $486,000 | $285,000 | Jul 24, 2026 |
| Legal and professional fees | FY2025 | $142,000 | $83,000 | Jul 24, 2026 |
This memorandum has been prepared by Value Alpha for the addressee named above and is strictly private and confidential. It is an indicative analysis based on information provided and publicly available data; it is not an offer, a fairness opinion, or investment, legal or tax advice. Figures are estimates and are rounded. Value Alpha accepts no liability for decisions taken in reliance on this document.