Was 2018 a Buyer’s or Seller’s Market?

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Was 2018 a Buyer’s or Seller’s Market?

According to the Pepperdine Private Capital Markets Project (in conjunction with the International Business Brokers Association and M&A Source) Q4 Market Pulse survey of business intermediaries, M&A advisors, and other business transaction professionals based on their recent deal experiences, “2018 marks the first full year in which four of the five market segments have been described as a seller’s market”.

What they found after analyzing the survey data is that compared to the data from 2017’s Q4 report, 2018 was considered more of a seller’s market in all deal ranges except for the $500K to $1MM deal range.

Advisors across the board agree with the sentiment that the market is a seller’s market, but what is contributing to the current state of the market?

According to experts, a positive lending environment, low interest rates and an extremely low unemployment rate (which makes growing a company organically difficult) are all driving both individual buyers and companies looking for mergers to the market as well. This high demand from buyers has created a prime environment for sellers to charge premiums in light of the competition between buyers. Simply put, demand is outpacing supply.

To gain insight on these and other current market conditions, contact Luis de la Prida 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 Anthony at Anthony@nybbinc.com or 516-346-5272.

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