I was on a call with a colleague a few weeks ago who led with the question, “So, what’s the multiple these days?” The reference was to what multiple of EBITDA practices are selling for in the current marketplace.
The spring has been active for our company. We’ve performed more than 10 valuations in the past 6 weeks, had productive conversations with colleagues at the banks, and even supported buyers working with other brokerages (appraisers). We’ve seen where things are at.
The answer to our colleague’s question is…”It depends.”
If you were asked, “What’s a house cost these days?”, how would you answer it? A better question might be, “What information do you need to answer that question?”…Where is the house located in Canada? What suburb? Is it on a busy street? Are there schools close by? How much square footage is it? What’s the design? How many bedrooms and bathrooms? Is it updated? Most importantly, where’s the nearest Costco?
Here is a graph of how EBITDA multiples often reflect practice value. [Key word: “often”.]
