I currently own a small TPA Shop that specializes in defined contribution plans. A very good friend of mine owns a TPA Shop that specializes in defined benefit plans. During the normal course of events it came up that we should know what the value of our firms are, and what values should be applied to other "books of business" we might like to buy. Is there a standard formula that is used for this purpose, allowing for a reasonable estimate? I have heard values like 1-3 times annual revenue plus receivables. While I know that this type of transaction should only be done after consultation with some expert (who???), it would be nice to be able to have such an estimate going in. Anyone have any comments?

http://benefitslink.com/boards/index.php?showtopic=31377

Thanks!