Enterprise value (EV) is the total value of a business’s operations, calculated as the equity value plus net debt plus any other debt-like items minus cash. EV represents what a buyer is paying for the business as a going concern, independent of how it is financed.
In Australian M&A, transaction multiples are typically expressed against enterprise value (e.g. “the business sold for 6x EV/EBITDA”), and corporate advisor success fees are usually calculated on enterprise value.