Empirical Determinants of Enterprise Value in M&A Transactions A Cross-Sector Regression Analysis of U.S. Small-Cap Public Company Deals (2005–2025)

Abstract

Existing methods for calculating a firm’s enterprise value (EV) inherently depend on subjective estimates and assumptions leading to variability based on the practi- tioner’s judgment. This thesis uses a deductive, quantitative approach to investigate which factors influence EV in mergers and acquisitions (M&A). The analysis is based on secondary data from Capital IQ, covering U.S. small-cap public M&A transac- tions between 2005 and 2025. Using ordinary least squares (OLS) regression , the results show that market capitalization, net debt, and total assets are significant pre- dictors of EV. These findings suggest that these financial variables play a key role in determining the value of a company in M&A deals. This data-driven valuation method offers a more objective alternative to traditional approaches.