Doug Rodgers – CEO of Focus LLC

Posted on March 21, 2011

Doug Rodgers, CEO of Focus LLC publishes an annual update on the M&A market.  You can download this year’s version here.  We’ve interviewed Doug to get his views on the current M&A market.

The most interesting take-away from the study is that, while M&A activity in larger companies collapsed during the financial crisis, sales of $50 million and under revenue companies declined far less in comparison.

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(click on image to enlarge)

There was, however, a severe decline in EBITDA multiples for under $50 million companies (shown in blue) from 8x to 6x from 2008 to 2009.  This drop was fully recovered in 2010, though we are still well below the all-time peak of 9x in 2005.

 

 

 

 

 

(click on image to enlarge)

From our perspective, this indicates that business owners tend to react more to their personal situations and opportunities, rather than carefully planning their business exits.  This can have profound implications to sellers in a market where the variance in sales multiples was fifty percent from the low in 2009 to the high in 2005: sale in a strong market can result in much more satisfactory results for the seller.

To download the report click here.

To hear the full interview click on Doug’s picture below.

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