Industrials

Broad and deep expertise across multiple
industrial sectors

How much are companies worth in the Industrials 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
Industrials graph 1 reversed-1

At the end of H1 2019, the global, all market average Enterprise Value to EBITDA*  multiple for listed industrials companies was 11.2x. This was greater than for the previous six months and slightly up on the previous year, when listed industrials companies were trading on a multiple of 11.0x. Within the industrials sector, trading multiples varied between 8.7x and 13.1x 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

Industrials graph 2 reversed-1

The average multiple of EBITDA paid globally in industrials transactions has declined slightly over the past few years. It currently stands at 10.8x. 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.

† Note, the transaction multiples above are calculated from raw 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

industrials graph 3 reversed-1

In H1 2019, there were 3,232 transactions globally in the industrials sector. This is down on the preceding 6 months, when there were 3,369 transactions. Although slightly declining over the last few years, the number in the last 6 months suggests demand for industrials 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.