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Valuation Webinar
June 2024
Poll Question
Do you think that the number of deals completed in the most recent quarter has:
Page 2
Increased against the last quarter
Decreased against the last quarter
Stayed the same as the last quarter
C)
B)
A)
An overall slowdown in M&A extends to transactions
with UK-based targets
Between May 2023 and
April 2024, there were
261 reported UK
acquisitions with reported
EBITDA multiples made by
trade and PE.
Of these, 137 were
profitable, reported an
EBITDA multiple and were
not considered outliers
(Multiple >25x).
Nov23 – Jan24 had the
most transactions at 73.
May23 – Jul23 had the
fewest transactions at 55.
Page 3
Outliers are companies that did not report an EBITDA multiple, were loss-making or had
an EBITDA multiple in excess of 25x.
55
69
73
64
28
39 39
31
41 44 43
31
16
23 23
13
0
10
20
30
40
50
60
70
80
May23 - Jul23 Aug23 - Oct23 Nov23 - Jan24 Feb24 - Apr24
No. of Transactions - UK Targets
All Transactions All Transactions exc. Outliers
Sub £50m Sub £50m EV exc. Outliers
Poll Question
Do you think overall EBITDA multiples are:
Page 4
Increasing – showing an upward trend
Decreasing – showing a downward
trend
Remaining consistent – showing a flat
trend
C)
B)
A)
EBITDA Multiples are increasing once again
Overall, EBITDA multiples
have increased through
the year; the sub-£50m
transactions have seen a
decrease in the most
recent quarter.
The level of sub-£5m
transaction in Aug23 –
Oct23 suppressed overall
deal multiples in that
quarter but multiples
have since risen.
Page 5
Outliers are companies that did not report an EBITDA multiple, were loss-making or had
an EBITDA multiple in excess of 25x.
8.37
5.77
9.33
10.42
5.60
5.19
8.34
6.73
5.00
6.00
7.00
8.00
9.00
10.00
11.00
May23 - Jul23 Aug23 - Oct23 Nov23 - Jan24 Feb24 - Apr24
EBITDA Multiples by Quarter
Median EBITDA Multiple
Median EBITDA Multiple (Sub £50m EV)
Growing EBITDA has an outsized impact on
valuations… Roughly 5x EBITDA is still the norm for
lots of smaller businesses
The normal expectation
is that a larger company
would warrant a higher
EBITDA multiple than its
smaller counterparts due
to factors such as greater
market share and pricing
power.
This valuation gap is
evidenced by the
multiples achieved by the
various EV bands in the
chart opposite.
Page 6
Outliers are companies that did not report an EBITDA multiple, were loss-making or had
an EBITDA multiple in excess of 25x.
4.78
7.69
9.64
10.65
12.44
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Less than
£5m
£5m - £25m £25m - £50m £50m -
£250m
Over £250m
Median EBITDA Multiple by EV
High levels of volatility persist in most industries
After removing those
transactions described as
outliers, a wide spread
exists within individual
industries.
TMT businesses continue
to be the most highly
valued companies.
Nevertheless, the
industry has a high-level
of volatility.
Page 7
Outliers are companies that did not report an EBITDA multiple, were loss-making or had
an EBITDA multiple in excess of 25x.
US still dominates overseas acquisitions of UK firms
Overseas transactions
are typically reserved for
the most valuable
companies – in part due
to the complexity of
completing the deal and
managing operations in a
foreign jurisdiction.
Of 75 transactions valued
at under £50m EV, only
25% were acquired by an
overseas entity.
Page 8
Acquirer Base
No. of
Transactions
Median EV
No. of Transactions
(Sub £50m EV)
UK 178 £8,940,000 61
US 42 £397,000,000 4
Sweden 5 £89,000,000 1
France 5 £1,120,000,000 0
UAE 4 £591,200,000 0
Netherlands 3 £7,810,000 1
Canada 3 £465,400,000 0
Other 21 £29,000,000 8
Total 261 £21,000,000 75
Limitations
Financial information may be incomplete for some entries – Our sources
of information are limited to the disclosures made by either party in a
particular transaction, or through investigative journalism conducted by
our data providers or other reputable news source in discussion with
either company participating in the transaction.
Financial information is subject to restatement – A subject company may
restate various financial data at a date later than the analysis was
conducted.
Various deals may not be captured by the above search criteria –
Reasonable efforts have been made to ensure that the entries included
within the dataset are appropriate, but we cannot ensure that all
relevant details are captured, as this is influenced by the classification
techniques of our data providers and by the disclosures made by
transacting companies.
Previous deal data may not be indicative of future market trends –
Valuations (and multiples) may fluctuate with the economic cycle.
Adjustments made to Enterprise Value are subjective – The adjustments
made to the Enterprise Value to arrive at Equity Value will depend on
the particular companies and transactions in a number of respects.
We note that the data analysis may be naturally limited in some respects.
Page 9
Page 10
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Cambridge +44 (0) 1223 565035
Caribbean +1 758 451 9251
Channel Islands +44 (0) 1481 715669
City of London +44 (0) 20 7065 2660
Dubai +971 (0) 48786360
Ely +44 (0) 1353 662892
Mayfair +44 (0) 20 3909 04807
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Peterborough +44 (0) 1733 343275
Sawston +44 (0) 1223 578787

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Company Valuation webinar series - Tuesday, 4 June 2024

  • 2. Poll Question Do you think that the number of deals completed in the most recent quarter has: Page 2 Increased against the last quarter Decreased against the last quarter Stayed the same as the last quarter C) B) A)
  • 3. An overall slowdown in M&A extends to transactions with UK-based targets Between May 2023 and April 2024, there were 261 reported UK acquisitions with reported EBITDA multiples made by trade and PE. Of these, 137 were profitable, reported an EBITDA multiple and were not considered outliers (Multiple >25x). Nov23 – Jan24 had the most transactions at 73. May23 – Jul23 had the fewest transactions at 55. Page 3 Outliers are companies that did not report an EBITDA multiple, were loss-making or had an EBITDA multiple in excess of 25x. 55 69 73 64 28 39 39 31 41 44 43 31 16 23 23 13 0 10 20 30 40 50 60 70 80 May23 - Jul23 Aug23 - Oct23 Nov23 - Jan24 Feb24 - Apr24 No. of Transactions - UK Targets All Transactions All Transactions exc. Outliers Sub £50m Sub £50m EV exc. Outliers
  • 4. Poll Question Do you think overall EBITDA multiples are: Page 4 Increasing – showing an upward trend Decreasing – showing a downward trend Remaining consistent – showing a flat trend C) B) A)
  • 5. EBITDA Multiples are increasing once again Overall, EBITDA multiples have increased through the year; the sub-£50m transactions have seen a decrease in the most recent quarter. The level of sub-£5m transaction in Aug23 – Oct23 suppressed overall deal multiples in that quarter but multiples have since risen. Page 5 Outliers are companies that did not report an EBITDA multiple, were loss-making or had an EBITDA multiple in excess of 25x. 8.37 5.77 9.33 10.42 5.60 5.19 8.34 6.73 5.00 6.00 7.00 8.00 9.00 10.00 11.00 May23 - Jul23 Aug23 - Oct23 Nov23 - Jan24 Feb24 - Apr24 EBITDA Multiples by Quarter Median EBITDA Multiple Median EBITDA Multiple (Sub £50m EV)
  • 6. Growing EBITDA has an outsized impact on valuations… Roughly 5x EBITDA is still the norm for lots of smaller businesses The normal expectation is that a larger company would warrant a higher EBITDA multiple than its smaller counterparts due to factors such as greater market share and pricing power. This valuation gap is evidenced by the multiples achieved by the various EV bands in the chart opposite. Page 6 Outliers are companies that did not report an EBITDA multiple, were loss-making or had an EBITDA multiple in excess of 25x. 4.78 7.69 9.64 10.65 12.44 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Less than £5m £5m - £25m £25m - £50m £50m - £250m Over £250m Median EBITDA Multiple by EV
  • 7. High levels of volatility persist in most industries After removing those transactions described as outliers, a wide spread exists within individual industries. TMT businesses continue to be the most highly valued companies. Nevertheless, the industry has a high-level of volatility. Page 7 Outliers are companies that did not report an EBITDA multiple, were loss-making or had an EBITDA multiple in excess of 25x.
  • 8. US still dominates overseas acquisitions of UK firms Overseas transactions are typically reserved for the most valuable companies – in part due to the complexity of completing the deal and managing operations in a foreign jurisdiction. Of 75 transactions valued at under £50m EV, only 25% were acquired by an overseas entity. Page 8 Acquirer Base No. of Transactions Median EV No. of Transactions (Sub £50m EV) UK 178 £8,940,000 61 US 42 £397,000,000 4 Sweden 5 £89,000,000 1 France 5 £1,120,000,000 0 UAE 4 £591,200,000 0 Netherlands 3 £7,810,000 1 Canada 3 £465,400,000 0 Other 21 £29,000,000 8 Total 261 £21,000,000 75
  • 9. Limitations Financial information may be incomplete for some entries – Our sources of information are limited to the disclosures made by either party in a particular transaction, or through investigative journalism conducted by our data providers or other reputable news source in discussion with either company participating in the transaction. Financial information is subject to restatement – A subject company may restate various financial data at a date later than the analysis was conducted. Various deals may not be captured by the above search criteria – Reasonable efforts have been made to ensure that the entries included within the dataset are appropriate, but we cannot ensure that all relevant details are captured, as this is influenced by the classification techniques of our data providers and by the disclosures made by transacting companies. Previous deal data may not be indicative of future market trends – Valuations (and multiples) may fluctuate with the economic cycle. Adjustments made to Enterprise Value are subjective – The adjustments made to the Enterprise Value to arrive at Equity Value will depend on the particular companies and transactions in a number of respects. We note that the data analysis may be naturally limited in some respects. Page 9
  • 10. Page 10 Bishop’s Stortford +44 (0) 1279 155888 Cambridge +44 (0) 1223 565035 Caribbean +1 758 451 9251 Channel Islands +44 (0) 1481 715669 City of London +44 (0) 20 7065 2660 Dubai +971 (0) 48786360 Ely +44 (0) 1353 662892 Mayfair +44 (0) 20 3909 04807 Newmarket +44 (0) 1638 666160 Norwich +44 (0) 1603 709330 Peterborough +44 (0) 1733 343275 Sawston +44 (0) 1223 578787