When looking at the BVR for specific industries, what makes a business fit into the different quartiles to price negotiation? This is for all industries / PE as well - not just for SMB Acquisition so it is hard to set... I would say:
>$500K EBITDA ~ 25%
$500K-$2M EBITDA - 50%
2-5M - 75%
5M+ ...
Thoughts?
Using BVR Valuation Multiples for Negotiation
by a searcher
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BVR is one of the best. However, there is a wide range for each type of business.
Over-reliance on multiples risks loosing a good opportunty or over-paying. Two businesses (same product, same size, same profit, across from each other, no concentration, etc) can have materially different value. Seasoned buyers run pro-forma and do sensitivity analysis, and use multiples as a sanity check.