hire an auditor to do due diligence first, from there you either go for consultant or use your own ratio such as payback period, P/E ration, net cash per share and how many times of net assets. then compare those ratios to average industry ratios on bursa. from there you will have at least some idea how much premium you are paying, and determine are these premium worth it? just like other forumer said, it might be their assets such as land building, location or its intelligible asset such as pattern, licence or know how etc.

This post has been edited by klthor: Feb 15 2016, 04:51 PM

for laylam, PE ration = Price/Earnings. example, i sell you my business for RM16mil and my yearly earning from my business is RM2mil. PE ration = 16mil/2mil = 8 times. however, this figure is merely meaningless without benchmark to your industry PE ration.