- January 3, 2022
- Posted by: Steve Fylypchuk
- Category: Research Reports
No Comments
Here are the latest 4 quarter averages, based on the 4Q20-3Q21 IBBA/M&A Source Market Pulse results. They are good at helping explain what is market/average/standard. The results definitely shift as transaction sizes get larger, but for the most part, in the <$2M size, the average seller finance amount is 10%, 81% of the transactions do NOT include working capital (AR/AP) in the price, and 84% of the transactions use SDE as the main multiple metric.
% of Seller Finance of Total Consideration by Deal Size
Seller Finance 4Q20- 3Q21 Avg | |||
Valuation Size | SF | Earnout | Total |
<$500k | 11 | 3 | 14 |
$500k – $1 mm | 9 | 2 | 10 |
$1 mm – $2 mm | 9 | 3 | 12 |
$2 mm – $5 mm | 8 | 2 | 10 |
$5 mm – $50 mm | 6 | 5 | 11 |
<$2 million | 10 | 2 | 12 |
% of Transactions where Working Capital (AR/AP) was Included or Excluded as Part of the Price by Deal Size
Working Capital Included: 4Q20- 3Q21 Avg
Valuation Size | Incl % | Excl % |
<$500k | 17 | 83 |
$500k – $1 mm | 17 | 83 |
$1 mm – $2 mm | 30 | 70 |
$2 mm – $5 mm | 38 | 62 |
$5 mm – $50 mm | 80 | 21 |
<$2 million | 21 | 79 |
% of Transactions that Used SDE vs. EBITDA as the Main Multiple Metric
SDE v EBITDA | 4Q20- 3Q21 Avg | |
Valuation Size | SDE | EBITDA |
<$500k | 92 | 9 |
$500k – $1 mm | 86 | 14 |
$1 mm – $2 mm | 75 | 25 |
$2 mm – $5 mm | 62 | 38 |
$5 mm – $50 mm | 21 | 79 |
<$2 million | 84 | 16 |