IS ANYONE SEEING LOWER MULTIPLES YET?
We have heard conflicting information whether or not multiples have already started to drop due to COVID. Obviously it is very depended on industry but I am curious to hear from the community whether or not their particular industry vertical search has seen multiples start to fall.
EX) We are currently working with a business that initially had a (pre-COVID) all-cash offer. That particular buyer ended up pulling out in mid March but a new one stepped in with a higher valuation! However the new structure was 1) 60% cash, 2) 10% guaranteed in a 1yr 6% sellers note, and 3) contingent on a 2yr earn-out.
Al Danto (Managing Partner and Rice Grad Professor) and I just finished our whitepaper on the structural changes in the LMM M&A market during and post-COVID. I would be happy to share with everyone in the next day or so. It will be posted on our LinkedIn page and website.
LinkedIn: https://www.linkedin.com/company/exit-advisors-llc
Website: https://www.exitadvisors.com/resources