Tuesday, October 9, 2018

Construction Industry Multiples

EBITDA multiples are sometimes used to determine approximate business value in a sale transaction.  Multiples can vary widely by industry and within industry segments.  Following is data for a sampling of construction industry transactions from companies sold between 2010 and September 2018 with reported EBITDA in a range of $250,000 to $2 million. Construction Industry Multiples by Segment Data: Businesses sold between 2010 and September 2018 with EBITDA(Earnings before Interest, Taxes, Depreciation and Amortization) between $250,000 and $2,000,000. Source: BVResources Deal Stats database. Example value calculation using Median Multiple: Electrical Contractor with $450,000 of ebitda may have a value of $1.8 million based on the median multiple calculation($450,000 x 4.0). Actual offers from buyers would be expected to fall within the 25-75 percentile ranges or $1.125 million($450,000 x 2.5) and $2.475 million($450,000 x 5.5). Higher EBITDA businesses with high qualitative factors would be expected to generate the highest offers.

The following blog post Construction Industry Multiples was originally seen on http://www.BMIMergers.com/

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