Businesses Sold in Transportation, Communications, Electric, Gas & Sanitary Sector – Recent Trends (Multiples and Profit Margins)

Businesses Sold in Transportation, Communications, Electric, Gas & Sanitary Sector – Recent Trends (Multiples and Profit Margins)

By: Diana L. Miles, ABI

You may hear what’s going on in the overall M&A industry, but wouldn’t you rather know what’s happened recently in the above private sectors if that’s your business space? And how do your trends measure up?

Gauging trends over time will help you in your exit planning strategy/timing. From private buyer transaction trends recently reported from Business Valuation Resources, LLC (BVR) in the most Q3 2015 Pratt’s Stats Private Deal Update (PDU):

Measurement                                                                                   2013   2014

Median Purchase Price to Net Sales Revenue                                     .68     .59

Median Purchase Price to Seller’s Discretionary Earnings             2.81    2.72

Median Gross Profit Margins                                                                 78%    71%

Median Net Profit Margins                                                                     15%    12%

Now what to do with the information? If it makes sense to go further to prepare for your own exit and have us look even closer at the trends with attributes that more closely mirror your business, contact Diana at Miles@BridgeMergers.com.