EBITDA Multiple Up Sharply in Early Summer

Acquisition pricing based on target operating performance posted a big increase to a very high level in mid-2004. The jump apparently resulted from a significant number of banking and insurance deals. EBITDA multiples tend to be larger for financial services targets than for targets in most other industries. The swollen size of the EBITDA multiple, however, did not match the deal flow pace, which has picked up modestly but still remains below an extremely brisk level. Pricing for public targets seemed more in line with the deal flow trends. Average premiums over stock prices rose but still demonstrate continued buyer discipline. Most of the calculations were logged prior to the summertime stock market decline concentrated in July and early August. Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com