In the second quarter of 2018, EBITDA multiples (median selling price/EBITDA) for private companies plummeted to 2.8x, the largest decline reported in recent years, according to BVR’s DealStats Value Index (DVI). The relatively steady trailing three-month average trend line from the third quarter of 2014 through the first half of 2017 (see graphic) gave no clear indication that large fluctuations in multiples paid would ensue in the quarters ahead. From the third quarter of 2017 to the present, EBITDA multiples have trended down. EBITDA multiples across all industries were highest over a five-year period in the third quarter of 2017, at 4.7x.
The DealStats Value Index (DVI) summarizes valuation multiples and profit margins for private companies that were sold over the past several quarters. The DVI is a quarterly newsletter and is complementary with a subscription to DealStats. If you are a subscriber to DealStats, you can download the current issue to see all the latest transaction trends if you click here.