Pick a random company. Find recent EBITDA. Adjust at will. Choose an anemic multiple, usually 5X. Calculate EV. Subtract debt.
Then, have a junior analyst type said rudimentary math into a massive proprietary spreadsheet template gratuitously slathered in graduate-school vocabulary, and bless with a Managing Director's holy water. It is now imperative that one refers back to this XLS analysis obsessively, no matter the context – for this is the winning formula for negotiation, honed through decades of past practice...
Ignore excess working capital, assets in all forms, and everything else not labeled “debt” on the balance sheet; especially if liquidation value far exceeds the proposed equity offer.
Ignore favorable backlog and pending contracts, regardless of DD validation. Same with evident growth rates, industry trends, and mitigating expense adjustments characteristic among closely held companies.
Ignore shifting risk versus reward correlations in financial markets. (Risk might get you fired, but management fees have always offered sufficient reward.)
Ignore the industry's $1T+ in idle capital, and the fact that nobody is doing worthwhile deals at low multiples anymore. Valuations are opinions, while transactions are facts. Accordingly, one must also ignore the glaring absence of any recent transactions necessary to prove one’s low-ball valuation assertions “right”.
Now, structure the aforementioned 5X beyond recognition, further leveraged in the firm's favor, and tell the seller how hard the firm has tried to make this deal work.
Deposit generous paycheck.
Repeat.
(Disclaimer: There are certainly exceptions, but firms with a rational perspective on value can be rather hard to find.)