ARRRGGGHHH! The Buyer is Re-Trading

When you’re selling your business there are many twists and turns on the way to closing. One of the more frustrating scenarios occurs when the buyer decides to Re-Trade. This usually happens once a Letter of Intent (LOI) has been signed and the buyer finds something during their due diligence period that they had not anticipated. They then begin to renegotiate the price, or Re-Trade.

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We're thrilled to share that our service area has expanded. Alongside our expertise in selling businesses in Minnesota and Iowa, we are now fully licensed to sell Wisconsin businesses. If you or someone you know is looking to sell their business in Wisconsin, don't hesitate to get in touch – we're here to support you every step of the way.

Another Business Sold!

The Transitions In Business team is excited to announce the successful sale of another Residential Assisted Living facility. This thriving and efficiently managed business attracted a robust and enthusiastic pool of buyers eager to take the reins. We are delighted for the seller, who can now embark on a well-deserved retirement, and equally excited for the new owner as they begin their entrepreneurial journey in business ownership.

M&A Statistics

Business Value

AVERAGE SELLING PRICE AS OF ASKING/BENCHMARK Q4 2020-2023

On average, sellers are receiving valuations at 86% of benchmark or better. As is the trend, businesses in the lower middle market performed the best, receiving nearly all or above the private benchmark they set with their advisors before going to market. 

<$1M in Purchase Price typically goes to market with an asking price whereas those in the $5M-$50M typically go to market without an Asking Price, however, with an expectation of what buyers will most likely pay. Those between $1M & $2M may fall in either camp. It greatly depends upon type of Buyer.

AVERAGE MULTIPLES BY DEAL SIZE Q4 2020-2023

Multiples remained relatively consistent across market sectors, with one notable exception. Advisors reported that businesses with enterprise value of $5M-$50M received an average valuation of 5.3x EBITDA, a meaningful jump over last year, but still down from the red hot market in Q4 2021. 

<$500K - $2M in Purchase Price reflected as multiple of SDE (Seller’s Discretionary Earnings); $2M-$50M as multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization).

Data taken from the Q4 2023 Market Pulse Report published by the International Business Brokers Association (IBBA) and M&A Source.