Infront Eurozone Small Cap Valuation Index

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The Universe

The reference universe of our index includes all companies matching the following criteria:

  • Location: Eurozone countries
  • Market Capitalization: Between 15M€ and 500M€ (3-month average market cap at the end of quarter)
  • Excluding financial sectors (Banks, Insurances, Financial companies, Real Estate)

The benchmarks are using the following criteria, also using 3 month average for market capitalization and excluding financial sector:

  • Eurozone Large Caps: Market capitalization > 500M€
  • Nordics Small Caps: companies located in Sweden, Denmark, Norway, Finland or Iceland with a market capitalization between 15M€ and 500 M€
  • USA Small Caps: companies located in the USA with a market capitalization between 15M$ and 500M$
  • The Argos Mid-Market private company valuation index is based on an in-depth scrutiny of M&A transactions in Eurozone. Visit our partner Epsilon Research website for more information on their index:

The EV/EBITDA Multiple

EV means Enterprise Value, a widely used financial indicator for business valuation in the financial industry. For our valuation index, we calculate each company's EV at the end of each quarter, using quarter-end market capitalization, last annual audited net financial debt and minority interests. Hence, EV takes into account the market capitalization (market value of the firm's equity) plus the net financial position (total financial debt - cash), resulting in a sort of net price the acquirer would have to pay in order to buy all shares of the target company.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation & Amortization. It is a famous aggregate used in financial analysis to evaluate the operational performance of a firm. It is also useful when comparing companies from various sectors and regions. For our valuation index, we use a standardized LTM (Last Twelve Months) EBITDA, a rolling or trailing twelve month aggregate. We are using the interim financial statements (semesters or quarters).
EV/EBITDA is the most widely used valuation indicator in the market. There are of course several other market valuation measures (including P/Earnings, EV/Sales, P/Book...etc) that can be used, as well as other valuation methods such as Discounted Cash Flows. However, EV/EBITDA is generally considered as a relevant measure in most cases as it compares the market value of a firm with the EBITDA (see above). Our Infront Valuation Index is the median value of all EV/EBITDA multiples calculated for all companies in the index universe.