After stalled M&A, lockdowns, and a pandemic, it’s easy to forget that small enterprise value was declining through most of 2019. EBITDA multiples (median selling price/EBITDA) were down already, as shown in the summary table, before hitting a low in the second quarter this year, at just 3.7x, according to BVR’s DealStats Value Index (DVI).
As we all know, deal volume for small companies dropped to ‘almost a standstill,’ says Adam Manson of BVR.
The third-quarter improvement was dramatic across all industries, rebounding to 5.1x—the highest level since 2018. ‘As the economy, and in particular, the M&A transaction portion, continues to recover, DealStats will continue to monitor the trends in the EBITDA multiple,’ says the report.