EBITDA Multiples Rise In Line With Deal Flow

Deal pricing strengthened in early spring, driven by increased volume and continued improvement in the quality of targets being drawn out by the M&A upturn. Moving to the highest level in a year, the average EBITDA multiple reached 9.15 in the three months ended April 30, moving into important new territory with regard to pricing trends. The smallish but significant upturn from the prior three months indicates a delicate balance between what sellers are demanding and what buyers are willing to pay – at least contemporaneously. Pricing for public targets was flat to slightly down based on premiums over stock prices and appeared to be influenced mostly by the ragged movements in the stock market. However, the trends seem consistent with the internal multiples that principally drive all deal pricing. (c) 2005 Mergers and Acquisitions Journal and SourceMedia, Inc. All Rights Reserved. http://www.majournal.com http://www.sourcemedia.com