M&A sector is still on the rebound

BVWireIssue #106-2
July 20, 2011

In their State of the M&A Markets – Second Quarter 2011, PCE Investment Bankers report continued positive trends in M&A transaction volume. “Median valuation multiples in the less than $50 million, $50-$100 million, and greater than $250 million range increased over 1Q10 median multiples while median multiples in the less than $100-$250 million segment decreased by 21.9% versus 2Q10,” says the report author Michael Poole.

Noting similar trends, the new report by investment bank Berkery Noyes, First Half 2011 Online & Mobile Services Industry M&A Report, analyzes 2,750 transactions between 2009 and the first half of 2011 and concludes:

  • Total transaction volume increased by 13% over 2009, from 199 in 2009 to 224 in 2010.
  • Total transaction value increased by 81% over 2009, from $6.43 billion in 2009 to $11.62 billion in 2010.
  • Both the median EBITDA and revenue multiples in 2010 have increased from 2009, with the EBITDA multiple rising 36% from 8.1 to 11.0 and the revenue multiple rising 50% from 1.2 to 1.9.

In the “Main Street” M&A arena, BVR has just updated the BIZCOMPS® database with details on 400 sold private businesses. The deals in this update had a median selling price of $197,500 (excluding inventory) and a median Seller’s Discretionary Earnings of $110,000. In addition to this update, BVR is now offering the BIZCOMPS/BVR Deal Review publication, an exclusive new complimentary report that’s included with a BIZCOMPS subscription through BVR; click here for details. Lastly, we’ve added the “harmonic mean” to the subscriber results for the Sale Price to Annual Gross and Sale Price to SDE valuation multiples. To learn more, click here and “find” harmonic mean on the BIZCOMPS FAQ page.

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