Financial Services

Specialist expertise across all financial services sectors

How much are companies worth in the Financial Services 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

Financial services graph 1 - reversed-1

At the end of H1 2019, the global, all market average Enterprise Value to EBITDA* multiple for listed financial services companies was 18.3x. This was greater than the previous six months and up on the previous year, when listed financial services companies were trading on a multiple of 16.6x. Within the financial services sector, trading multiples varied between 14.6x and 25.5x 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, and it is generally the case that privately owned businesses are valued at a discount. Listed company data was accurate at 01/07/19

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

Financial services graph 2 - reversed-1

The average multiple of EBITDA paid globally in financial services transactions has fluctuated over the past few years. It currently stands at 12.3x. 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.

3. The volume of M&A transactions and acquisitions

financial services graph 3 reversed-1

In H1 2019, there were 1,370 transactions globally in the financial services sector. This is a slight increase on the preceding 6 months, when there were 1,364 transactions. Although slightly declining over the last few years, the high number in the last 6 months suggests demand for financial services 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.