Research on Current Market Environment

by a searcher from Columbia University - Columbia Business School

1 year ago

I'm in the early stages of a process and am trying to align on value. There is a sizable bid/ask spread right now which is stemming from the fact that the Seller is clinging to a high mark valuation that the banker advisor showed him when he was pitching to win the deal. That was in a different world (6-9+ months ago) vs. what we are in today and the foreseeable future given high interest rates and conservative financing. 

I am looking for any research or whitepapers for me to help spell out the fact that this new market environment has fundamentally changed the value of the underlying business. I realize this is a bit of a nuanced ask but has anyone seen any materials that could help, or has anyone had to do something similar to this recently? Thanks!

0 likes
132 views
5 comments

searcher from Harvard University - Harvard Business School

I unfortunately think it'll take some time for the valuation gap to close. I'd recommend putting what you think is a fair offer on the table, and if the seller doesn't like it, it makes sense to walk away sooner rather than later. In that case, you should try to leave things in as positive a state as possible, then check in a few months down the line to see if the seller is interested in reengaging within the terms you proposed.

1 year ago | like reply | 5 likes

searcher from Duke University - The Fuqua School of Business

Not sure they'll spell it out like that, but Centurica monitors and reports on sold multiples, which might quantitatively help tell your story

1 year ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.