Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.
Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.
Performance cookies are used to understand and analyse the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Advertisement cookies are used to provide visitors with customised advertisements based on the pages you visited previously and to analyse the effectiveness of the ad campaigns.
By Brandon Mack
The International Business Brokers Association (IBBA) and M&A Source has recently published their second quarter market research for 2018. The report is a statistical analysis of 277 respondents who answered a 25-question survey. This is the third and final part of a three-part series where I will examine the IBBA’s and M&A Source’s analysis of the market, including the median number of months to sell, most common industries, and median Seller’s Discretionary Earnings (SDE) multiple for under $500k, $500k to $1 million, $1 to $2 million, $2 to $5 million size ranges, and over $5 million.
For businesses sold for under $500K, the median number of months between the engagement and close was seven months. The most common industries in this range were personal services at 29%, restaurants at 19%, business services at 13%, and consumer goods at 13%. The median SDE multiple paid in this range was 2.0x.
In the $500K to $1M range, the median number of months between the engagement and close was eight months. The largest industries in this range were businesses services at 29%, construction at 15%, and personal services at 12%. The median SDE multiple paid was 2.5x.
The median number of months in the $1M to $2M range from engagement to close was nine months. The most deals per industry in the $1M to $2M range are as follows: business services at 23%, manufacturing at 13%, consumer goods at 13%, and personal services at 32%. 26% of the businesses sold this quarter in this range were sold at an SDE multiple of 3.25x, with the median 3.3x.
In the $2M to $5M range, 40% of the businesses sold took twelve months or longer from engagement to close, with a median of 9.5 months. 23% of the business sold in this range were in the manufacturing industry. Business services made up 17%, and construction made up 10%. 32% of the businesses sold in this range were sold at an SDE multiple of 3.25x, with the median 3.3x.
In the over $5M range, 57% of the businesses sold took twelve months or longer from engagement to close, with a median of 12.5 months. 50% of the business sold in this range were in the manufacturing industry. Construction made up 19%. Most of the companies in this range were sold based on a multiple of EBITDA, with a median of 5.9x.
