B E N C H M A R K I N T E R N AT I O N A L
WHY BUSINESS OWNERS SHOULD CONSIDER SELLING IN 2021
WH Y BUSI NESS OWNERS SHOULD CONSI DER SELLING I N 2 021
Benchmark International
A number of conditions have combined to create optimal selling conditions, including high levels of dry powder and positive EBITDA multiples.
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P R I VAT E E Q U I T Y PE is predicted to hit record levels of fundraising in 2021, with an expected and unprecedented $330 billion in total capital. With a hugely healthy fundraising environment and an existing $1 trillion in dry powder, sellers will find themselves in a strong position in 2021.
E B I T D A M U LT I P L E S In 2021 it is expected that a fifth of buyouts will be valued above 20x EBITDA. Low interest rates and strong demand for high-yield debt will also strengthen the seller’s position.
Even in the middle of the pandemic in 2020, more than half of all deals closed in the 8x-15x multiple ranges. Despite this fact, many business owners wrongly believe that 2021 is a bad time to sell, which has improved the prospects of those who are ready and willing to sell a healthy business as there is less competition, especially as a number of businesses struggled during the pandemic.
IN 2021 IT IS EXPECTED T H AT A F I F T H O F B U Y O U T S W I L L B E VA L U E D ABOVE 20X EBITDA. LOW I N T E R E S T R AT E S A N D STRONG DEMAND FOR H I G H - Y I E L D D E BT W I L L ALSO STRENGTHEN THE SELLER’S POSITION.
Benchmark International
MISCONCEPTIONS CONCERNING SELLING
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