Q4 2023 Market Update - EBITDA MULTIPLES TRENDING BELOW TYPICAL LEVELS
In the time analyzed, EBITDA multiples across all industries were highest in the third quarter of 2018, at 5.0x, and there has been a downward trend from that high point until the second quarter of 2022. Since then, EBITDA multiples have generally been trending upward, reaching 3.6x in the second quarter of 2023 before slightly decreasing in the third quarter of 2023 to 3.4x.
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EBITDA Multiples pulled back sharply at the end of 2022 and now have started to rise back
EBITDA Margins Rise in 2022 and Maintain High Levels in Q2 2023
EBITDA margins began to decline in the second quarter of 2022 but have trended positively since then, reaching 16% in the third quarter of 2023.
EBITDA margins were at their highest point in the first quarter of 2023, at 18%. The previous range was between 11% and 15% from the first quarter of 2019 through the fourth quarter of 2021. Since the fourth quarter of 2017, EBITDA margins have never been below 11%.
All-Time Median EBITDA Multiple for all Sectors is 4.1X
All-time EBITDA multiples remain the highest for the information sector (11.0x) and the utilities 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 median across all industry sectors for all time periods is 4.1x. The information sector has shown a notable recent increase, with the last 12-month EBITDA multiple rising to 16.8x when compared with its all-time period multiple of 11.0x.
the mining, quarrying, and oil and gas extraction sectors (8.1x). Meanwhile, th\
The information sector has shown a notable recent increase, with the last 12-month EBITDA multiple rising to 15.5x when compared with its all-time period multiple of 11.1x. The Finance and Insurance space has also shown a sharp rise to 12.1x from its all-time period multiple of 7.6x.
Ten-Year Trend for Private-Seller Sector Multiples
Median EBITDA multiples are trending positively across most sectors in 2023 year to date. The sectors that saw the most notable declines were educational services and manufacturing (a decline of 26% and 19%, respectively).
Median EBITDA multiples are trending positively across most sectors in 2023 year to date. The sectors that saw the most notable declines were educational services and manufacturing (a decline of 26% and 195, respectively).
across all sectors in 2022 (with the exception of accommodation and food services). The sectors that saw the most notable declines were educational services (a decline of 64%)
Data source: DealStats Value Index (Q4 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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