Report Overview – SME Valuation Index

This year MarktoMarket were delighted to work with UK200Group to provide in-depth data and analytics for the SME Valuation Index 2019

The 2019 study of SME valuations (with an average deal value of £5 million in 2019) indicated that Brexit and an uncertain political and economic landscape had little impact on multiples being paid for the UK’s smaller businesses in 2019.  The average EBITDA multiple paid was 6.1x versus 6.0x in 2018 (using October as the cut-off in each year).  Factors believed to be counteracting the negative impacts of political and economic uncertainty are believed to include: the low cost and plentiful supply of capital (both debt and equity); cheap Sterling, making UK businesses more attractive to overseas buyers; and an opportunity to take advantage of what is, for now, an advantageous tax regime for selling entrepreneurs.

In order to provide deeper insights into valuation trends, MarktoMarket will also be releasing a series of private market indices, providing analysis of deal multiples in specific sectors and size bands.  These indices are compiled using MarktoMarket’s proprietary data, which is gathered through a combination of machine learning and in-house data analysts, combined with data submitted by its customers, which include some of the UK’s leading M&A advisers and private equity investors.  Indices have long been a reference point for trends across markets but have been largely absent as a barometer for private company valuations due to the difficulty in securing timely data.  MarktoMarket’s data gathering processes and customer collaborations overcome this issue, allowing hitherto unavailable insight into valuation trends across deal-size ranges and sectors.

Doug Lawson, co-founder of MarktoMarket, states: “We were thrilled to work with UK200Group on the 2019 Index. The UK200Group is a trusted provider of private company valuation insights and we hope that our new collection of sector and size-based indices will be useful to its members.”

Simon Blake, Chairman of the UK200Corporate Finance Expert Panel, states: “We have been using the MarktoMarket data platform at Price Bailey for over a year and it quickly became apparent that they are the best positioned data specialist to generate valuable analysis from the collection and aggregation of M&A data from multiple sources.”

View the full MarktoMarket & UK200Group SME Valuation Index 2019 here.