Today’s M&A Climate
• Valuations overall have increased anywhere between 14%-30%, depending on the source and firm specifics. • It’s all about EBITDA in negotiations; net service revenue is no longer a “governor” on valuation. • Changing tax rates and confidence in backlog changing deal structuring rapidly from “rule of thumb” precedent.
• Private equity changing the negotiation pace and deal-making process. • Stock transactions becoming more frequent for smaller deals. • Retention strategies and stay bonuses top of mind as “great resignation” looms. • Cross-border and international transactions show confidence in the market.
2021 Transactions by Market Sector
This graph outlines the main markets served by both buyers and sellers. As expected, Hospitality-only firms aren’t really a hot commodity following COVID. On the other hand,
markets likely to be affected by the Infrastructure bill like municipal, transportation, water/wastewater, and federal are all seeing a good bit of selling activity. The ‘Other’ category is high due to Private Equity and niche firms.
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