Buyers Hold the Line On M&A Bids

Purchase prices continued moving off the mid-2003 spike in the first quarter of 2004, even as dealmaking was picking up steam. The dip in the average multiple of EBITDA was the second in succession for the 12 months ended March 31, although at nearly 16.8, the average multiple remained fairly high by historic standards. Deal announcements rose in the first quarter, but there has yet to be a broad-based contribution from a wide spectrum of industries. Sell-offs haven’t displayed the muscle that had been common in earlier up cycles, another factor that could be attributable to the pricing inconsistency. Premiums over stock prices also dipped. The stock market was generally static during the first quarter, indicating that the contraction in premiums was largely on the side of m&a pricing. Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com