Module II· Trading ComparablesIntermediate
Question
Which typical one-off effects do you adjust out of EBITDA for comps?
Answer
Standard adjustments:
- Restructuring charges (headcount cuts, plant closures).
- M&A transaction costs.
- Litigation settlements (large fines, settlements).
- Asset impairments (goodwill, intangibles).
- FX effects from unwinding hedges.
- IPO/listing costs.
- Pension one-offs (plan settlements, curtailments). Source: equity-research reports or management disclosure ('adjusted EBITDA').
Important
Consistency between target EBITDA and comp EBITDA — if you strip restructuring at the target, you must do it at the comps too.
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Pitch tip
Document the adjustments in a footnote per comp ('adjusted for $15m restructuring in 2024'). Seniors watch this closely.