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A Guide To EBITDA Multiples And Their Impact On Private Company Valuations

via Forbes

"One question that team members at my company, a boutique investment bank that provides merger-and-acquisition and capital-advisory services, have been fielding lately from both current and prospective clients is how interest rates can impact the valuations of privately held businesses. Clearly, we’re in a market environment where there are a considerable number of variables experiencing some level of volatility.

The main question that I feel is relevant to business owners, with respect to any impact on valuation trends, is how much additional growth a company would need to have in order to counteract any contraction in market valuation multiples.

In this post, I dive into a few scenarios to illustrate why contemplating a transaction when valuations are at all-time highs might make sense, especially if it’s clear that rising interest rates will have some impact on valuations going forward."


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