Financial Services

Specialist expertise across all financial services sectors

Our financial services sector team combines a broad range of experience across the insurance, life and pensions, banking and wealth management industries.

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 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

At the end of H1 2020, the global, all market average Enterprise Value to EBITDA multiple for listed Financial Services companies was 16.7x. This was down on the previous six months, when listed Financial Services companies were trading on a multiple of 17.2x. Within the Financial Services sector, trading multiples varied between 15.0x and 24.6x 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 01/07/2020.

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

Financial Services - graph 2

The average multiple of EBITDA* paid globally in Financial Services transactions has declined compared to the previous 6 months. It currently stands at 4.1x. When reviewing these multiples we break out businesses in the range $5-150m, as they tend to have unique attributes which affect their valuation. 
* 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

Financial Services - graph 3

In H1 2020, there were 1,329 transactions globally in the Financial Services sector. This is a decline on the preceding 6 months, when there were 1,594 transactions. Although slightly declining over the last few years, the 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.