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M&A Insights – Mark Young, Managing Partner, CKS Advisors

Welcome to the June edition of M&A Insights 2019. Our goal at CKS Advisors is to help you and your clients stay up-to-date on the current Merger and Acquisitions climate.

This month, we highlight IBBA & M&A Source’s Q1 2019 Market Pulse. The Report focuses on companies in the lower middle market with transaction values between $5M – $50M. Topics covered include transaction information, market sentiments, and market trends in the lower middle market.

Key Points:

  • “Although it is still a strong seller’s market with strong values, this is the first time in years that we’ve seen four out of five industry sectors report a dip in seller market sentiments… This is a sign the market may have peaked”- Dr. Craig Everett, Pepperdine Capital Markets Project
  • Purchase price EBITDA multiples for companies valued between $5M-$50M reported an average of 6.0x (only slightly lower than the 2018 peak of 6.1x)
  • Companies valued between $5M-$50M have seen a slight increase in the amount of time it takes to sell, with the average increasing from 10 to 11 months

Our Two Takeaways:

  • We agree, a dip in seller market sentiments in Q1 2019 may indicate the market has peaked but with strong activity continuing, we are taking a wait and see attitude
  • EBITDA valuation multiples remain historically elevated, including in the Arizona Market

Stay tuned for more updates on M&A activity in the future.

If you would like to learn more about the M&A market or are ready to explore options, we would be glad to meet. Please contact me at 480-351-8533 or myoung@cksadvisors.com.