Equity TT Fargo

Could someone please comment on question 5. It requires value of equity using GTM. In the question it says “FDF commands a 30% control premium”. Why does the solution assume the control premium is already included in the EBITDA multiple of 9? I thought the control premium should be increased by 30%.

Thank you!

GTM refers to takeover transactions, which by their nature will mean control is assumed, and will include a takeover premium.

If you are just taking a minority stake as in this case, you need to take off the control premium because you dont have control.