RE:RE:RE:RE:RE:EPS for 2016?sunshine7 wrote: "additional $76US " plus $51 = $127M. That is more than double. Makes sense since AMCo was almost twice the size of Concordia. Don't confuse profit with EBITDA. I think investors focus on growth and EBITDA because that is what will pay for the investments.
There are many reasons that different valuation metrics are used to value different companies. Be careful drawing conclusions, as valuation theory is complex, and there is no "one size fits all". All prospective purchasers are interested in two basic things: Expected future cas flows and the risk of achieving those cash flows. Net Income is sometimes not used, because certain accounting items such as Depreciation and Amortization do no necessarily reflect cash flows. Alternatively, one could start with EBIT-DA and then deduct a provision for Sustainable Capital Reinvestment. The "I" in EBIT-DA refers to interest expense, which use depends on whether a levered or an unlevered valuation approach is used. Like I said before, there is too much theory behind all of this to deal with here.