10,000,000 10,000,000 9,000,000 9,000,000 8,000,000 8,000,000
$1,000,000 to $9,999,999
4,000,000 4,000,000
3,000,000 3,000,000
2,000,000 2,000,000
700,000 700,000
600,000 600,000
500,000 500,000
400,000 400,000
300,000 300,000
200,000 200,000
100,000 100,000
sn ent rum nst al I ytic
5,000,000 5,000,000
DISCOUNT ZONE
The size of the bubbles represents the size of the industry’s median sale multiple. The larger the bubble, the larger the multiple.
PREMIUM ZONE
The priciest industries can be found in the chart’s upper right region.
l Ana
$100,000 to $999,999
30,000,000 30,000,000
tory
20,000,000 20,000,000
3/3/08 6:52:11 PM
3,000,000
$100,000 $100,000 to $999,999 to $999,999
3,000,000
alty e ci l Sp ma Ani g n rvices isin Se and rch Me n chine rs Ma erato Op
Under $100,000
Companies in industries that appear above the diagonal line sell at a premium to annual revenue. Those that fall below the line sell at a discount to annual revenue.
MEDIAN SALE PRICE
$10,000,000 or more MEDIAN SALE PRICE
$10,000,000 or more
40,000,000 40,000,000
The least expensive industries are in the lower left region. $1,000,000 to $9,999,999
50,000,000 50,000,000
ora
1,000,000 1,000,000 900,000 900,000 800,000 800,000
$100,000 to $999,999
This chart depicts the marketplace for private companies. Here’s how to read it: 60,000,000 60,000,000
La b
6,000,000 6,000,000
1487555772
0408_FVA_final.indd 100
rk ent 2,000,000 t& Wo ipm ns l Ar o r e rete al Equ tati rcia n n sn Oth s onc it eS ice me sig C er & rial erv osp om De rvic n c b e e H C 2,000,000 t gS phi eS Lum Ma al & erin n Gra olin n ilding dic rk ine lies Gas Me Wo Eng n Bu n n upp ta l e &S ctio e n tM u r ent n n wa str ies hee r d n ipm nts al n ries s n &S ust Har n Co res Equ Ind nde Loc ato uct ing n on d i g Sto t cal spo cept abor Prod , Si ing urin ruc ctri orre Ex g L tal ver fing act ds Ele nst n C ing, Testin d Me nuf Roo le Goo oor Co Co Loa ruck Ma n n l sn ate s b T ls n rs & bric ura n F cie vice n a ica F nke sn Ser ond iod a e Age l n N c a i Per age B n ent ent erv s riev sn ym net Ret Car S quipm rtg plo vice abi Mo d tion Em Ser ms n &E nC n ore e e n e rma h rts Car Syst ists ng Info & Arm ic Pa Kitc rk lth e ent nni en n ood ive Wo Pl a Hea Refus s of D rad ctro ect n 1,000,000 nW n eT ntry g& ic me Ele l y e n o Det i l p s H Clin ner actors olesa Car Store ounse chi s& ers res en n es Ma Contr Wrkhn ice are e C nag Sto rad vic Off 900,000 rial 1,000,000 Ma es es de eT rdw cap es Wo are ts n er r r a l a ust w t H sal nds Stor Sto ts & y Sto duc n S g n Ind cial Tr ctrica a n o n i n r e Sof L r ole n n Liquo rnitur e Age rocer Ele Wh lated P nditio vices er & Spe o 900,000 put n n Fu Estat n G 800,000 Re rC Ser al Com n s & g & Ai e R n icle erie n n i ps t a roc Veh n res Sho G , He tor rts 800,000 Sto epair ing Mo ew Pa 700,000 ing R mb N loth otive n Plu s& sC ps en’ utom plie Sho ops m n e o Sup 700,000 al A eation t Sh s am age n W ener ain ishing cr n & G o Stor e G 600,000 R &P / n Toy vice sn air Furn nt & s gw by, ltie Ser me vice y Rep ome Hob ruckin pecia y n rs & use Ser od s H B e m u v oke 600,000 g S aph al T n A omoti Top & llaneo , Br Loc ertisin ithogr res nts ut n isce s raden Sto dv ,L Age 500,000 M nA & A ting ce l T rde i n n a nce i l a ns ura g P eta G Sig cial Pr Ins kin n Ries & r n me Drin urser ade 500,000 sn n ing N l Tr ice i Com l v i a t a eas Ser Re Ret &L air n n tal gn res es Rep 400,000 Ren hin Sto ps c i ent Fis n ail erv ir Sho ipm Ret n s n try & rinting n nS es gn Equ isc. arde ouve lac tore n pin g es P M P 400,000 S G d S Feos r cial ishin kee n ng n & lty & Foo erevi,c mer F ook nki vices Law Nove & Dri isc. nug lStu Com ry & &B er M t S n , ng & rgtirsic sn res Gift Eating Care diti dveA n ods vice , Fo , Au n Day lorists g Go ps ail A Ser ure ting F o 300,000 ult hild tin ess h ct M r oun C n n S i ric n Acc Dire Spo le Ag Bus n Bicyc hops sn S ice n 300,000 uty erv y Air Bea Retail b al S n ion xcept n keries sn cat E g Ba Edu vcs., t Ru S s& cep ool urier , Ex Sch nts Co sn Pla vice es n n ng Ser sn ani es tor ce sh e e S ervic -cle 200,000 nan c. n ss S dis Wa s e e i Dry t n t han sonal ain Car g, M l Fi erc gM er sin sica dM sP erti ldin Phy 200,000 Use aneou Bui Adv n ilities l cel Fac Mis
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100,000
100,000
Under $100,000
70,000,000 70,000,000
The horizontal axis measures median annual revenue. The vertical axis measures median sale price. 7,000,000 7,000,000
APRIL 2008
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INC . MAGA ZINE
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80:1 40:1 20:1 10:1 5:1
90,000,000
90,000,000 80,000,000
80,000,000 70,000,000
70,000,000 60,000,000
50,000,000
60,000,000
50,000,000
40,000,000
40,000,000
30,000,000
30,000,000
20,000,000
20,000,000
10,000,000
9,000,000 10,000,000
9,000,000 8,000,000
8,000,000 7,000,000
7,000,000 6,000,000
6,000,000
5,000,000
5,000,000
4,000,000
4,000,000
3,000,000
3,000,000
3/3/08 6:52:15 PM
1487666877
0408_FVA_final.indd 101
$10,000,000 $10,000,000 or more or more
$1,000,000 $1,000,000 to $9,999,999 to $9,999,999
Agriculture, Agriculture, Forestry, Forestry, and Fishing and Fishing Mining Mining Construction Construction Manufacturing Manufacturing Transportation, Transportation, Communications, Communications, Electric, Electric, Gas, and Gas, and Sanitary Sanitary Services Services Wholesale Wholesale TradeTrade RetailRetail TradeTrade Finance, Finance, Insurance, Insurance, and Real and Estate Real Estate Services Services 80:1 40:1 20:1 10:1 5:1
SECTORS SECTORS SALE SALE PRICE PRICE TO TO EARNINGS EARNINGS RATIO RATIO
Highlighted Highlighted circlescircles represent the median represent the median data for datathe forentire the entire sector.sector.
MEDIAN MEDIAN ANNUAL ANNUAL REVENUE REVENUE