The Control Premium

A control premium (often 20-40%) is the extra paid for control. It is already baked into transaction multiples - do not add it twice.

By the end you can

✓Define the control premium
✓Avoid the double-counting mistake

Control premium

The premium an acquirer pays over a target's pre-announcement trading price to gain control - commonly in the 20-40% range.

Do not double-count

Transaction multiples already embed the . Applying a separate on top of a precedent-transaction multiple counts it twice and inflates the value. A is something you'd add to trading comps to estimate a takeover price - not to deal comps.

Check yourself

You value a target with precedent-transaction multiples and then add a 30% control premium on top. This is: