Q2 2023 Market Update - EBITDA MULTIPLES DECLINE
The median EBITDA multiple decreased by 14% in the first quarter of 2023. In the period analyzed, EBITDA
multiples across all industries were highest in the third quarter of 2018, at 5.0x, and there has been a downward
trend through the second quarter of 2022. Since then, EBITDA multiples have generally been trending upward,
declining to 3.0x in the first quarter of 2023.
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EBITDA Multiples pulled back sharply at the end of 2022 ana now have moved below the all-time average
EBITDA Margins rose in 2022 and continue to maintain high levels in 2023
EBITDA, as a percentage of revenue, hit 20% in the first quarter of 2023 (the highest recorded figure over the
periods analyzed). The previous range was between 11% and 14%, from the first quarter of 2019 through the
fourth quarter of 2021. The lowest EBITDA margin during the period analyzed was 11% in the second quarter
of 2019.
Selling Price to EBITDA by Sector
All-time EBITDA multiples remain the highest for the information sector (11.1x) and the mining, quarrying, and
oil and gas extraction sector (8.1x). Meanwhile, the lowest all-time EBITDA multiples are in the accommodation
and food services (2.6x) and the other services sectors (3.1x). The information sector has shown a notable recent increase, with the last 12-month EBITDA multiple rising to 16.1x when compared with its all-time period multiple of 11.1x. Finance and insurance have seen a multiple increase from 10x to 11.2 over the past 12 months.
The median across all industry sectors for all time periods is 4.2x; unchanged from our last update.
10 yr Median Selling Price to EBITDA by Sector (Private Companies)
Median multiples paid for private targets, are organized by industry sector. Multiples across the 15 sectors appear to rise and fall based on various factors. Median EBITDA multiples decreased across all sectors as compared to the previous year.
Data source: DealStats Value Index (Q2 2023) - The DealStats Value Index summarizes valuation multiples and profit margins for private companies that were sold over the past several quarters. Business Valuation Resources (BVR) captures this private company transaction data in its DealStats platform.
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When owners need to leverage, sell or reorganize their assets, we answer the age-old question "What is it worth?".
We provide our clients and their advisors peace of mind by preparing professional valuations that stand up to scrutiny from lenders, the Courts, and Canada Revenue Agency.
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