M&A Advisors Expect End of Strong Market is Near

analyzing data

M&A Advisors Expect End of Strong Market is Near

Whether or not the current strong seller’s market is going to continue is the current question on everyone’s mind. The current market has lasted long enough to shock experts and draw everyone’s attention, raising great speculation as to how long the high multiples and lengthy upswing will last. Experts predict, however, that the end is near.

Pepperdine Private Capital Markets Project (in conjunction with the International Business Brokers Association and M&A Source) analyzed data from its 2018 Q4 Market Pulse survey completed by business intermediaries, M&A advisors, and other business transaction professionals based on their recent deal experiences. Here’s what they found:

2% of advisors expect the strong market to expire within less than six months.

30% of advisors expect the strong market to expire within 6 to 12 months.

28% of advisors expect the strong market to expire within 13 to 18 months.

23% of advisors expect the strong market to expire within 19 to 24 months.

9% of advisors expect the strong market to expire within 24 to 48 months.

And 8% of advisors expect the strong market to expire in greater than 48 months.

The major takeaways here are that 32% expect the strong market to expire within the next year and a massive 83% expect it to expire within the next 2 years.

According to Craig Everett, PhD, Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project, current market conditions are driving up deal flow and valuations. However, Everett says, “Considering that it’s taking about a year to sell a business valued between $2 million – $50 million sellers should consider going to market before the market flips.”

To gain insight on these and other current market conditions, contact Tony Calvacca of The NYBB Group. The NYBB Group can be a resource to help business owners determine the marketability and approximate value of their business.

If you would like to discuss this article or schedule a private and complementary consultation, please contact Tony at tony@nybbinc.com or 631-390-9650.

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