For beauty, consumer, or healthcare executives who just watched a competitor get acquired or raise capital
A competitor just closed a deal. Your board wants to know what it means for you. Your investors are recalculating. Before you answer the question everyone is asking — what would we be worth? — it is worth understanding what the announced number actually represents, and what a serious buyer would find if they opened your books today.
Most announced deal values include structures that significantly reduce the actual cash the seller receives. In the beauty, consumer, and healthcare transactions I have worked on recently, earnout structures have become standard — not exceptional. In several recent deals, 15–25% of the headline value was contingent on the business hitting projections over two to three years. That is the buyer explicitly discounting the seller's growth story and making them prove it post-close.
The headline multiple also includes a control premium — typically 20–40% above what the business would trade at on a standalone basis. That premium only materialises in a competitive sale process with multiple bidders. If you are benchmarking your own value against an announced deal, you are comparing against a number that was inflated by deal dynamics you may not be able to replicate.
Multiples have compressed across the board. In beauty, roughly 3–5x revenue where it was 6–8x. In consumer goods, mid-market EBITDA multiples from 10–14x down to 7–10x. In healthcare, 14–18x EBITDA down to 10–14x. A competitor's deal at today's multiple would have looked very different three years ago. The headline you are benchmarking against may already reflect compression, not a premium.
A serious buyer will not value your business based on a single multiple. They will run three independent approaches that frequently diverge by 30–50%: a discounted cash flow built on stress-tested assumptions, not your management case; a comparable companies analysis using actual trading multiples with size and private company discounts that can total 35–50%; and a precedent transactions analysis that includes control premiums.
In my experience, the number a seller has in mind — usually a headline multiple applied to their forward EBITDA — is almost always higher than what the triangulation produces. Synergies take roughly five years to materialise, not the two to three most management teams assume. And the buyer knows they will only capture about half of total synergies — the rest gets competed away or priced into the deal.
The competitor's deal gives you one data point. A proper valuation gives you the full picture.
A competitor transaction gives the buyer a direct benchmark. The comparison will be sector-specific. In beauty, if the acquired brand had 22% EBITDA margins on a DTC-heavy mix and yours has 14% on a wholesale-heavy mix, the buyer will see the gap immediately — channel economics drive beauty valuations as much as brand strength. In consumer, if the acquired company operated at 18% EBITDA margins with a mature retail network and yours is at 12% while still investing in distribution expansion, the multiple will reflect it. In healthcare, if the acquired company had recurring revenue from long-term contracts and yours depends on project-based revenue, the multiple will reflect the difference in revenue visibility.
But the comparison goes deeper than top-line metrics. In every quality of earnings process I have been through, the first finding is margin overstatement. The specifics vary — trade spend netting in beauty, freight misclassification in consumer, R&D capitalisation in healthcare — but the result is the same: the real margin after restatement is typically 200–800 basis points lower than reported. The gap between the EBITDA a seller presents and what a buyer's advisors confirm is typically 15–30%.
The competitor deal does not set your valuation. It sets the buyer's expectation for what the diligence process should reveal. If your numbers cannot withstand the comparison, the conversation ends early — or it continues at a significantly lower price.
The deals that close well are not always the ones with the best businesses. They are the ones where the seller was prepared. In my experience, the difference between a well-prepared seller and an unprepared one is 15–25% of deal value — through avoided repricing, cleaner working capital adjustments, and stronger negotiation leverage.
Working capital adjustments now appear in the vast majority of private transactions. Most sellers discover how this mechanism works only after signing. The EBITDA-to-cash conversion question will come up, and across beauty, consumer, and healthcare, 30–50 cents of every EBITDA euro never becomes cash. Buyers will also scrutinise sector-specific items: returns and markdown reserves in beauty, retail deductions and chargebacks in consumer, regulatory contingencies and pending approvals in healthcare. Deferred capex — where the outgoing team cut maintenance spending to inflate near-term EBITDA — catches buyers every time, and now they check for it every time.
A competitor's transaction creates a window. How long it stays open depends on market conditions and sector sentiment. Whether you can walk through it depends on whether your numbers, your story, and your plan can survive the process that follows.
A competitor's deal is a data point, not a destiny. The question is not whether your business could be worth what theirs was. The question is whether your numbers, your margins, and your plan would survive the same process. That is what we help you answer.
Bonneau Advisory — M&A Strategy for Consumer, Beauty & Healthcare