Purchase Price Multiple: Case Study between Real Companies

Purchase price multiples in M&A tell you how many times revenue or EBITDA buyers pay for a target. In a world where deal value is up 39% in 2025 to about $4.3 trillion, the multiple story matters more than ever. PwC’s mid-year trends show global M&A volumes down 9% in H1 2025 versus H1 2024, but deal values up 15% to $1.5 trillion. Median global multiples sit at 10.8x in Q2 2025, about 14% below Q4 2024. That shift isn’t random. It reflects buyer caution, financing conditions, and the influence of megadeals (Deals exceeding B skewing averages and benchmarks) on reported averages. Logically, you see more selective bidding in large caps, while mid-market activity holds steadier on price discipline.

US markets show a divergence. US median multiples rose in H1 2025 relative to Q4 2024, while Europe and Asia Pacific did not keep pace. Deals above $1B rose 19% in H1 2025 vs H1 2024; those above $5B rose 16%. Large deals still carry a substantial control premium, around 30%, which aligns with historical norms for competitive auctions and strategic value capture.

In October 2025, US M&A deal value surged 146.5% year over year, driven by billion-dollar transactions. Structure and certainty matter.

For private companies, the picture is tighter. The private company median price-to-sales (or price-to-net sales) multiple fell to 0.6x in Q1 2025 from 0.7x in Q4 2024, according to DealStats Value Index data summarized by KMCO. That means smaller, private targets still trade at a discount to public comps in many sectors, and the quality of earnings matters more in negotiations. You’ll also see a persistent 30% average control premium in large deals, underscoring the premium buyers pay for certainty of control in dominant strategic deals.

The big story in 2025 is megadeals. Bain notes megadeals >$5B represented more than 75% of the increase in deal value for the year, while JPMorgan reports overall global dealmaking at $4.3 trillion, a 39% rise from 2024.

Strategic deal volume rose 21% in Q3 2025 versus Q3 2024, and total deal value gains were driven largely by these large transactions. In the context of purchase price multiples, megadeals distort the headline medians upward or downward depending on timing and sector mix, which is why you must drill into deal size bands when evaluating multiples.

Case study: two real-world players and how the purchase price multiple played out

Case in point: Salesforce’s 2019 Tableau acquisition and Nvidia’s ongoing Arm discussions illustrate the practical mechanics, even when outcomes vary. Salesforce paid about $15.7B for Tableau, a deal that combined top-line expansion with product synergies across cloud data and analytics. If you back into a rough multiple, you’re looking at a purchase price around $15.7B against Tableau’s revenue at the time in the low hundreds of millions, plus growth prospects in data analytics. You’d figure a revenue multiple in the mid-teens to low 20s, depending on the year and method of normalization, and an EBITDA multiple that reflected Tableau’s profitability profile and cross-sell velocity. The practical takeaway: in tech, where ARR growth and usage-based monetization matter, buyers pay premium multiples for strategic data platforms that can lock in customers across ecosystems.

Now compare that with Nvidia’s bid for Arm. The proposed $40B deal, announced in 2020, aimed to scale Nvidia’s CPU/GPU stack with Arm’s processor IP. The deal highlighted a different dynamic: a hardware and IP play where the value wasn’t just current earnings but a forecasted platform moat. The regulatory and strategic scrutiny swamped the deal, and the close never happened.

Still, the discussion around multiples mattered: buyers weighed Arm’s revenue base, growth trajectory, and licensing model against the premium embedded in the price. In theory, the transaction would have commanded a high multiple given Arm’s IP leverage and potential cross-sell effects, but the final outcome shows how antitrust, strategic fit, and capital structure can override initial multiple attractiveness.

In today’s climate, you’ll see similar logic in large tech and platform plays. Median large-deal multiples in Q2 2025 are about 37% below the Q3 2021 peak, which tells you that buyers are valuing scale and synergy but pushing back on certainty and integration risk. The private market’s 0.6x price-to-net-sales suggests that outside the top tier, buyers demand discounting to reflect execution risk and integration costs. Yet, when megadeals land, they swamp the averages and push whole sectors toward higher valuation expectations.

For practitioners, the actionable steps are clear. First, map your target’s value driver: is it revenue growth, margin resilience, or platform leverage? Then test price against multiple frames: revenue multiple, EBITDA multiple, and price-to-earnings where applicable.

Use public comps to sanity-check and apply precedent from similar sector deals. Remember that the control premium in large deals remains around 30%, so you must account for the incremental value of certainty and governance control in your model.

The data from 2025 supports a pragmatic approach: seek targets with durable revenue visibility and defensible market positions, structure earnouts or milestone-based earnouts where appropriate, and prepare for due diligence that scrutinizes customer concentration, gross margins, and recurring revenue mix. US deal value momentum in late 2025 shows buyers will pay for strategic fit (but you’ll need to deliver a credible narrative for synergies that justify the chosen multiple).

Practical takeaways

• Use multiple lenses: revenue multiple, EBITDA multiple, and net sales basis. Don’t rely on a single measure.
• Adjust for deal size and market segment. Megadeals skew medians; adjust your analysis to the size band you’re studying.
• Expect a premium for control around 30%, but be prepared to negotiate with governance contingencies and earnouts.
• Private targets usually trade at lower multiples than public peers; use DealStats and cross-check with public comps to validate offers.
• Monitor the deal environment: 2025 saw a rebound in volume and value driven by megadeals, so price expectations for core platforms may be elevated but not universal.

If you’re building the purchase price model for a current deal, start with a base-case scenario using the 10.8x global median EBITDA multiple from Q2 2025, then stress test for sector-specific dynamics, growth trajectories, and financing costs. For a cap table and integration plan, ensure you model run-rate synergies with a clear integration timeline, or you risk overpaying on day one and under-delivering on value creation.

What this means for practitioners is simple: stay disciplined on multiples, segment your analysis by deal size, and anchor negotiations with a credible reason for the premium you’re paying. The deal landscape in 2025 confirms that value creation still hinges on strategic fit and execution, not just headline multiples.

If you want more in-depth terms and case studies, keep reading Matactic. We’ll continue to break down terms, illustrate with real deals, and provide practical steps you can apply to your own M&A practice. Sign up for our free M&A course and keep digging into the Matactic glossary for more terms you’ll actually use at the deal table.