Business Brokerage/M&A Market Pulse 4Q17 – Part 3 of 3

Buying a business For Buyers For Sellers Selling a business

Posted by Ron Buck on

By Brandon Mack

The International Business Brokers Association (IBBA) and M&A Source have recently published their fourth-quarter market research for 2017. The report is a statistical analysis of 264 respondents who answered a 25-question survey. This is the final part of a three-part series where I will examine the IBBA’s and M&A Source’s analysis of the market.

For businesses valued under $500K, the median amount of time between the engagement and close was six months. The most popular industries were personal services at 21%, restaurants at 17%, businesses services at 17%, and consumer goods at 14%. The median SDE multiple paid in this range was 2.0.

The largest industries in the $500K to $1M range are businesses services at 27%, construction at 17%, personal services at 10%, and consumers goods at 10%. Business services have increased by 17% in comparison to last year. The most common SDE multiple paid was 2.5.

For, businesses valued between $1M and $2M, the median number of months between engagement and close was nine months. The most deals per industry in this range are as follows: consumer goods at 19%, manufacturing at 13%, construction at 10% and financial services at 10%. This year business services have decreased from 28% to 6%. The median SDE multiple paid was 3.25 and increase from last year’s 2.75.

In the largest price range of $2M to $5M; the median number of months from engagement to close was ten months. 29% of the businesses sold in this range were in the manufacturing industry. Business services made up 19%, construction made up 14%, health care made up 14%, and consumer goods made up 10%.