Ebitda multiples - Europe
September 29, 2023
by a searcher from Universidade do Porto in Matosinhos, Portugal
What is your recommended source for information on EBITDA multiples in Europe?
September 29, 2023
by a searcher from Universidade do Porto in Matosinhos, Portugal
What is your recommended source for information on EBITDA multiples in Europe?
from IESE Business School in London, UK
UK-based, but below thoughts should work for Europe and RoW
At very first you should get high-level multiple based on common sense (these are very rough but good to start with in developed European economies): <4x non-recurring <1m EBITDA small businesses, 4-5x multiple work for reoccurring 1-1.5m EBITDA businesses, 5.5-6.5x is likely 'median' SF businesses with meaningful 40-70% recurring and 15-30% EBITDA margin businesses, >7x would be either higher >15% revenue growth rate, or higher margins > 25% or very high recurrence and long-term contracts etc.
When you start narrowing down the multiple range, I'd first look at industry and ideally find comparable publicly trading companies in the same industry (might be different country). For most of those you should be able to identify broker coverage who will calculate multiples not only for this company, but for its peers; moreover if you manage to find "coverage initiation" broker report for the company, you might find a lot of information on the industry, multiples, margins etc. Broker reports are either available online for small ones or via Thomson Reuters, Bloomberg and other subscriptions accessible with most of MBA school subscriptions (ie interns)
Talk to searchers who acquired similar company in other country - this will give you a lot of insight to the sector and multiple likely won't be too far
You might use BVR multiples available through Searchfunder or say Portuguese brokers might do monthly reports on multiples, but be very careful with those as they often are average temperature across many many tiny to multibillion transactions that make them incomparable. So better find 3-5 relatively relevant companies than use those multiples
Happy to chat if anything unclear
from IE Business School in Milano MI, Italia
Another possible source of data is the local chamber of commerce. In Italy you've Telemaco: https://www.registroimprese.it/telemaco
Telemaco is a service offered by the Italian chamber of commerce and available to everyone. It's a database that stores all the Finanical statements of listed and non-listed italian limited liabilities companies. It's a precious source of information both for financial and Multiple infos. There are a lot of acquisition in the middle market performed by industrial buyer that are available in the FS of these companies that can help you to understand the average multiple of SMEs companies.
Feel free to reach me out in private if you want more info about this tool.