The value created when two combined businesses are worth more together than apart — usually from cost savings, and more speculatively from <em>revenue gains</em>.
The valuation multiple paid to acquire a business — most often <em>EV / EBITDA</em> — that sets the price basis the entire deal return is measured against.
Valuing a business by the multiples its publicly traded peers trade at — a <em>relative</em> valuation that prices a company against the market, not its cash flows.
EBITDA projected forward as if current conditions and recent actions <em>applied for a whole year</em>, rather than what was historically reported.
The valuation multiple a business is sold at on exit — the assumption that, set against the entry multiple, drives much of a deal's <em>projected return</em>.
Valuing a business by the multiples paid in past acquisitions of similar companies — a relative method that captures the <em>control premium</em> trading comps miss.