Acquisition pricing spiked in mid-2003, based on the average multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). The upturn coincided with announcement of some large transactions in the late summer and early fall, which included several megadeals in financial services. This followed a flat trend in multiples in early 2003 and preceded a softening of the average multiples at mid-year, when deal volume tailed down. Public companies – according to the one-year average of purchase price premiums over target stock prices – remained in check, reflecting both discipline on the buy side and the lengthy upturn in the stock market.
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