2020-2023 Valuations

by a searcher from University of South Carolina - Darla Moore School of Business

1 year ago

As we know, ###-###-#### had a lot of businesses get a huge bump in sales due to low interest rates and stimulus.  In general, these are reflected in earnings, which seem elevated above 2020 and definitely 2018/9. 

2023 is expected to have a recession and a slow down in general. Are buyers taking this into account and making lower offers based on the slowdown which is expected in the next 1-2 years?

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6 comments

searcher from Birla Institute of Technology and Science

Short Answer - Yes, buyers are starting to negotiate on price and adding that extra cushion for uncertainty for the upcoming slowdown. The trend is continuing for the valuation to be lower as the demand falls due to higher interest rates. Early this year, The business used to fly off the shelf in a few days once listed, now we have numerous brokers reducing price (multiple times), open for creative deal structure, seller financing, and partial equity purchase as well. I feel this is a good time to find deals and be able to work with a seller closely for a creative deal structure to share some of the risks during an economic slowdown.

11 months ago | like reply | 0 likes

searcher from University of British Columbia

Following!

11 months ago | like reply | 0 likes

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