By: Reizchel Oasay and Ron Buck
The M&A market is dynamic, and the second quarter of 2024 has revealed some noteworthy trends. The International Business Brokers Association (IBBA) and M&A Source have released their latest market research, providing valuable insights for buyers and sellers.
Buyer’s or Seller’s Market? It Depends.
The market dynamics vary significantly depending on the price range of the business:
Deal Timelines and Offers
The time it takes to close a deal can vary widely:
The number of offers received also fluctuates across price ranges, with businesses in the $500K-$2M range typically receiving 1-3 offers, while those in the $5M-$50M range often receiving 3-6 or more offers.
Valuation Multiples: SDE and EBITDA
Key valuation metrics include Seller’s Discretionary Earnings (SDE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). Q2 2024 saw some notable shifts:
These changes highlight the importance of using industry-specific multiples and considering multiple valuation methodologies, as the mix and quality of businesses in the analysis can impact the quarter-to-quarter change.
Key Considerations for Buyers and Sellers
In Part 2, we’ll explore the motivations and demographics of buyers and sellers in the current M&A market.