2023 Ebitda Multiples

January 19, 2023

by a searcher in Farmington Hills, MI, USA

Will the Ebitda multiples for 2023 be higher or lower than they were in 2022? I have yet to find any information on what valuations will be. Does anyone know accurate information on what they may be this year?

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Reply by a searcher
in Alpharetta, GA, USA

Multiples this year will be the same as last year and the year before and the year before that and the last 5 years. A seller who can’t get paid a compelling price (ie multiple on cash flows) isn’t going to be a seller, regardless of this mild recession we are entering, or higher rates, or whatever. At least not for a business you actually want to own. SMBs that sell via ETA are already so ludicrously cheap (comped to public companies) that you shouldn’t expect a discount ever. If the economy retrenches as it did it 2020, then the seller pipeline goes dry - you don’t get desperate sellers looking to hit a down bid. And when it’s high times, sellers are looking to get paid the normal multiple on peak cash flows. Pick your poison but don’t expect multiples to change because rates are temporarily higher (albeit still very low by historical standards).

Sorry for the rant.

Reply by a searcher
in San Diego, CA, USA

I am intrigued to know more. Please take this with a grain of salt, but from my understanding, based on the insights and perspectives of industry experts and what I have gathered from listening to podcasts, it appears that there is a general agreement that valuations and multiples are decreasing(looming recession, rising unemployment, etc). However, it is worth noting that each industry may have its own unique dynamics and variations

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