hard · Corporate Credit Analysis distressed
A distressed company is valued at 5.5x EBITDA in a restructuring.
If current EBITDA is $85M but the industry mid-cycle EBITDA is $110M, and the analyst believes the current downturn is cyclical, which valuation is most appropriate for a recovery estimate?
- $935M, using healthy-market multiples on the mid-cycle EBITDA base
- $605M, using mid-cycle EBITDA with a distressed multiple
- $380M liquidation floor, based only on hard asset value
- $467.5M, applying current trough EBITDA to stay conservative
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