Consumer

Advisers who understand your sector

Our consumer sector team combines a broad range of experience across consumer-facing businesses and has in-depth understanding covering retail, branded products, food and drink, leisure and travel.

Members of our advisory team have worked in an operational, management or advisory capacity for a wide variety of companies in the sector, including:

How much are companies worth in the Consumer sector?

The following 3 graphs will give private business owners a broad indication of the value of their business:

1. The Enterprise Value to EBITDA* multiples on which comparable listed companies are trading
Consumer graph 1 v3

 

At the end of H2 2019, the global, all market average Enterprise Value to EBITDA multiple for listed Consumer companies was 16.5x. This was only slightly lower than the previous six months and up on the previous year, when listed Consumer companies were trading on a multiple of 15.7x. Within the Consumer sector, trading multiples varied between 15.4x and 17.7x across the range of sub-sectors. Smaller businesses generally traded on lower multiples.

* EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation
† Note, the Enterprise Value to EBITDA multiples above are for listed businesses. By comparison privately owned businesses are generally valued at a discount. Listed company data was accurate at 10/01/2020.

2. The multiple of EBITDA paid by acquirers of comparable businesses

Consumer graph 2

The average multiple of EBITDA* paid globally in consumer transactions has declined slightly over the past few years. It currently stands at 9.4x. When reviewing these multiples we break out businesses in the range $5-150m, as they tend to have unique attributes which affect their valuation. Smaller businesses have generally been sold on lower multiples.

* EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation
† Note, the transaction multiples above are calculated from raw historic data. This typically understates profits and therefore valuations actually achieved are generally at lower multiples of “normalised” profits.

3. The volume of M&A transactions and acquisitions

Consumer graph 3

In H2 2019, there were 2,711 transactions globally in the Consumer sector. This is slightly up on the preceding 6 months, when there were 2,576 transactions. Although slightly declining since 2016 H2, the increase in the last 6 months suggests demand for Consumer businesses remains fairly buoyant.

For further information as to how these valuations and statistics are computed, and their impact on your transaction, please contact us.