Home | TrendTracker | PowerBlog Reviews | The Experts | Newsletter
ABOUT
SMALL BUSINESS TRENDS brings you daily updates on trends that influence the global small business market.
Anita Campbell, Editor
Past life: CEO, corporate executive, tech entrepreneur, retailer, general counsel, marketer, HR ... (more)
email me
free business magazines
FREE BUSINESS MAGAZINES
Trade publications FREE to qualified professionals. No hidden offers and no purchase necessary.
On Wall Street
The Deal
Computing Canada
 CIO
Employee Benefit
Oracle Magazine
100+ additional titles. Click to browse.
ARCHIVES & SEARCH
Previous Small Business Trends articles can be found at the links below:
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
Or, use the search box below to find a
specific post:


NEWSLETTER
Sign up for our FREE Small Business Trends newsletter. (View Current)

We publish regularly and promise we won't share your email address with anyone. (Privacy Policy)
SMALL BIZ INFO & RESOURCES
BLOGS TO READ DAILY*
* Don’t have time to read several dozen blogs a day? Pick two or three. Your brain will thank you for it.
ONLINE COMMUNITIES
BLOG DIRECTORIES
THE BUZZ

SPECIAL RESOURCES
Small Business Trends Radio
Tuesdays, 1:00 PM Eastern U.S. time
on Voice America network
Click to listen

November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Monday, June 20, 2005
Midsize Businesses Sell for Higher Multiples
A few weeks ago I pointed out the strong market for the purchase and sale of small businesses.

It turns out that the market for midsize businesses in North America is strong and optimistic, also.

Buyers are plentiful. Prices are up. Financing is available.

That's according to the IMAP 2004 merger & acquisition (M&A) pricing survey for midsize businesses.

IMAP is an industry association of intermediaries who serve the midsize business market. IMAP stands for the International Network of Merger and Acquisition Partners.

"Multiples" are the primary way that the sales price for buying and selling a business is calculated. A number called a "multiple" is multiplied by another number, usually "earnings before interest and taxes" or EBIT as it is known in accounting parlance.

Selling multiples of privately owned middle-market companies increased dramatically over the past two years. In 2004 the median selling multiple for businesses under $10 Million in annual revenues sold through the IMAP network was 5.6 times earnings-before-interest-and-taxes. For businesses of $50+ Million in revenues, the median multiple was 7.1.

What are some other trends? Check out the comments in the Survey results for North America (page 6):
  • Corporate buyers are relying more on acquisitions for growth.


  • Financing is readily available. "Lenders galore."


  • The transportation business is doing well -- the best in 20 years.


  • Large price differences exist between high-tech manufacturers with proprietary technology (high prices), and ordinary manufacturers (lower multiples).
And the outlook for 2005? Also expected to be strong. Seventy-five percent (75%) or more expect to see more sellers and more buyers in the market, and over 90% expect to see similar or better access to financing.

Check out the survey, which also includes European and Asian results, in addition to North American results.

By Anita Campbell | Permalink | |
More news... more trends... more insight...

Home | Privacy | Terms | SmallBizTrends
(c) Copyright 2003 - 2005, Small Business Trends LLC. All rights reserved.