The UK200Group recently released their Small and Medium Enterprises Valuation Index. This provides detail on the sale multiples obtained on actual transactions involving the sale or purchase of UK businesses.
The data for the index is provided anonymously by the group’s members based on real transactions in the previous 12 months and the index is published in November of each year.
The published data shows a continuing increase in multiples, with multiples continuing to increase since the initial 2020 Covid lockdown and it is noted that deal volumes remain strong. Activity increased further in the run up to the 2021 budget as there was an expectation that Capital Gains Tax rates would increase.
The index provides data on both P/E (price to earnings) and EBITDA (earnings before interest, tax, depreciation and amortisation) multiples. Both multiples provide a comparison of the performance of the business to the price achieved.
The findings in the published UK200Group index support our own experience over the last 12 months, as we continue to see strong prices and strong activity in the mergers and acquisitions sectors. Confidence remains strong in the sector with good funding availability.
We are able to support clients with our experienced corporate finance team, liaising with the legal team and advising on the accounting and taxation aspects of the transaction.
Please talk to your Lambert Chapman contact partner should you be thinking of selling or acquiring a business.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.