Here is another email question from last week's Valuation series. Bill is wondering where I find the data that I use for valuations?
Here's what I like to use, and please send comments if you know of any better sources, uses or ideas.
Public Comps - The first task is to find the right comps to use. I use EdgarPro to do keyword searches on SEC filings. I use key business words or descriptions but also look for filings where companies list their competitors. I like that because if another company lists the target as a competitor, it's pretty hard to argue it out of the analysis. I also use OneSource or Hoover's for competitor lists. Google is a good tool to use as well, because most companies buy their competitor's names and products as AdWords. To get the numbers to build the comp table, I like to go back to EdgarPro and download financial data into Excel. I have also used Capital IQ to build quick and dirty comp tables, and it seems pretty accurate. However, I like to touch the data and build the table myself, so EdgarPro works well for me. I also use EdgarPro to search for fairness opinions to see what other deals have used as comparables and pre-acqs.
Precedent Acquisitions - I don't like to use the M&A databases that are out their, as I only look for a few quality matches. Finding the deals is hard, but I find that most of the above-mentioned tools are good for sleuthing them out if you set the searches to go far enough back. However, probably the best tool is VentureSource. I use VentureSource to do a keyword search on industry or product names and then pick out the list of acquired companies. Now the hard part is finding the data on these deals. Some of the data, typically only total consideration, are usually disclosed in press releases or in 10-Q's, but the best place to mine for gold nuggets like revenue or EBITDA of the target is conference calls. I use StreetEvents to search text of the calls to find this data. These calls are full of data, and I use the transcripts to document my numbers. I also use D&B to get financial data on private companies that have been acquired.
I always check VentureSource to see if I can find valuations of a target's financing rounds and to see how much money they've raised. I also really like Factiva to search for news articles, especially stories comparing products or services. I like finding the news about the target that doesn't show up on its Web site.