Deals in higher interest rate environment

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August 14, 2023

by a searcher in Toronto, ON, Canada

Are there any statistics that show the impact of prevailing interest rates on on deal multiples? Would expect that businesses have become cheaper, but what's the reality?

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Reply by a searcher
from Regent College in Bloomington, MN, USA
In the conversations I am having things are still in flux as sellers are not fully realizing the realities of the market and have pulled back hoping for higher valuations to return. Also, manufacturers have seen a regression in some of their backlogs and realizing their business trajectory may not be as rosy as they thought one year ago.
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Reply by a searcher
from IESE Business School in Lyon, Francia
Public information shows a slight drop in valuation but nothing significant. On the ground here in France, leverage is going down (50% max), which makes it more difficult for self-funded entrepreneurs and reduces the number of deals for companies below 1m€ EBITDA
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