Timothy Taylor & Co, the traditional British brewer and pub owner, recently transferred a 10% share of the business. MarktoMarket compared the pricing of this deal to the two large brewer-only deals: Camden Town and Meantime. The three companies had different capital structures, growth rates, and other business characteristics. Camden Town and Meantime were acquisitions of 100% of the share capital. Compared to these transactions, the new analysis found an 82% minority position discount for the 10% purchase.

As MarktoMarket co-founder Doug Lawson explains:

Conventional wisdom dictates that a minority stake should be discounted relative to a controlling stake to reflect the lack of control. This discount should be inversely proportionate to the size of the stake being transferred to reflect the fact that the rights of the shareholder become more limited as the position size reduces. This approach is generally accepted, however, the quantum of the discount is the subject of much conjecture.

MarktoMarket’s estimated enterprise value/EBITDA multiple for Meantime was 32x; our estimate for Timothy Taylor was 5.7x, a discount of 82%.

MarktoMarket collects data on both M&A and minority deals in the UK. Most of these minority transactions go unannounced.

For more details on these deals and MarktoMarket’s broader datasets, please contact Doug Lawson.