December Newsletter Transitions In Business

December 2023

Transitions Trends

Happy Holidays

Wishing you a joyous holiday season and a successful 2024!

As we welcome the New Year, we look forward to exciting opportunities ahead. If there's anything we can do to assist you, please don't hesitate to reach out.

M&A Industry Information

Higher Interest Rates Create

More Seller Carry

This past year has seen a dramatic rise in interest rates which has changed the landscape of mergers & acquisition deal terms. One year ago, a buyer’s offer would have a small percentage of the transaction price made up of seller carry (this is where the business owner serves as the “bank,” providing a promissory note to the buyer). Fast forward to today and buyers are making offers that include 50-100% of the transaction in seller carry.

Events

SCORE Webinar

The Art of Buying and Selling a Business

Join Sam Thompson, CBI, M&AMI, president and found of Transitions In Business, and John Thwing, SBA banker with Live Oak Bank the #1 SBA 7a lender in the country in dollar volume since 2018, as they present critical factors you need to know prior to buying or selling a business.

Thursday, December 14, 2023

9:00am to 10:30am

Hosted by SCORE Twin Cities

For more details or to register

M&A Statistics

Median Multiples Year-Over-Year

Q3 2019-2023

The Main Street market is rarely affected by the larger dealmaking environment. For example, over the last 40+ Market Pulse surveys, the median multiple for businesses valued under $500,000 hasn’t shifted beyond 2.0X to 2.3X.

However, we’re seeing a resurgence in value in the $5 million+ sector. It’s worth noting that the Q3 2021 multiple of 6.8 in this sector represented an all-time high in the 10-year history of the Market Pulse Report. Now, with a median EBITDA multiple of 6.5 in Q3 2023, we may be seeing a return to an M&A bull market.

Data taken from the Q3 2023 Market Pulse Report published by the International Business Brokers Association (IBBA) and M&A Source.

Transitions In Business

6550 York Avenue South, Suite 205

Edina, MN 55435

952-405-8470

sthompson@transitionsib.com

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