# Precedent Transactions

*Corporate Finance & M&A — Finicade finance glossary*

Precedent transaction analysis values a company using multiples paid in past acquisitions of similar businesses. Because those prices included control premiums and expected synergies, they sit above trading comps — typically 20–40% above — which is exactly why sellers favour this method. Deals age badly, so transactions from a different rate or credit environment tell you little about today.

**Also known as:** transaction comps, deal comps, M&A comparables

**Related terms:** [Comparable Company Analysis](https://finicade.com/glossary/comparable-company-analysis), [Valuation Multiple](https://finicade.com/glossary/valuation-multiple), [Mergers and Acquisitions (M&A)](https://finicade.com/glossary/mergers-and-acquisitions), [Synergies](https://finicade.com/glossary/synergies), [EV/EBITDA](https://finicade.com/glossary/ev-ebitda)

Source: https://finicade.com/glossary/precedent-transactions