You are evaluating a profitable mid-sized B2B software company that management may sell within the next 12 months, and your VP wants a defensible valuation range for an internal discussion in Merrill's valuation workstream. You have management's next-year forecast, a simplified free cash flow build, and a small public comp set. Assume USD, no major one-time items, and that net debt must be reflected in equity value. Your answer should explain how you would triangulate value rather than rely on a single method.
| Metric | Amount |
|---|---|
| Revenue (next 12 months) | $240,000,000 |
| EBITDA (next 12 months) | $54,000,000 |
| EBIT (next 12 months) | $42,000,000 |
| D&A (next 12 months) | $12,000,000 |
| Capex (next 12 months) | $14,000,000 |
| Increase in net working capital | $6,000,000 |
| Tax rate | 25% |
| Net debt | $30,000,000 |
| Diluted shares outstanding | 12,000,000 |
| Public comp median EV / EBITDA | 11.0x |
| Public comp median EV / Revenue | 2.8x |
| WACC | 10% |
| Terminal growth rate | 3% |
| Year 1 FCF growth for next 5 years | 8% |
How would you approach valuing this company, what valuation range would you present, and how would you reconcile the DCF and trading comp outputs into a per-share equity value recommendation?