July 2022
According to data from DealStats Value Index (Second Quarter 2022), the median selling price to EBITDA multiple for private companies in the first quarter of 2022 across all industries was 4.5. This is compared to a range of a low of 3.4 (second quarter of 2021) to a high of 5.5 (third quarter of 2018) from the period of second quarter 2016 to the first quarter of 2022.
The median EBITDA margin for private companies across all industries was at 17% in the first quarter of 2022, the highest level over the period of the second quarter of 2016 to the first quarter of 2022. Correspondingly, the median selling price to net sales multiple for private companies in the first quarter of 2022 across all industries was 0.64, also the highest level over the period of the second quarter of 2016 to the first quarter of 2022. The low median selling price to net sales multiple for private companies of 0.43 was in the second quarter of 2020.
The industry sectors with the highest median selling price to EBITDA multiple in the last 12 months were Information at 15.4, followed by Finance and Insurance at 12.8 and Educational Services at 9.0. The industry sectors with the lowest median selling price to EBITDA multiple in the last 12 months were Accommodation and Food Service at 2.3, followed by Arts, Entertainment and Recreation and Other Services both at 3.2. These sector multiples correspond with expected levels of earnings growth.
All in all, it appears that high revenue market multiples were being supported by high EBITDA margins, and EBITDA multiples are within a normal range, despite the pandemic, inflation and economic issues.
Relevant Court Cases
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Myers-Woodward, LLC v. Underground Services
Markham, LLC,
Court of Appeals Thirteenth District of Texas
No. 13-20-00172-CV,
filed June 16, 2022
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Robert Sipko v. Kroger, Inc.,
Supreme Court of New Jersey,
085022,
decided June 23, 2022
Recent Business Valuation Articles
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“The Valuation of E-Health and
Telemedicine StartUps,”
by Roberto Moro Visconti,
posted June 20, 2022
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“The Valuation of Pharma Patents,”
by Roberto Moro Visconti,
posted June 20, 2022
Recent Engagements
- Valuation of the non-voting common stock of
a specialty transportation company on a minority
interest basis for gift tax reporting purposes.
- Valuation of the Class B non-voting common
stock of a niche chemical products firm on a
minority interest basis for stock option issuance
and purchase/sale purposes.
- Valuation of a member interest of a real estate
holding company on a minority interest basis
for purchase/sale purposes.
- Valuation of a member interest in an investment
holding company on a minority interest basis for
charitable gift/income tax reporting purposes.
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