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Business Valuation, Recapitalization, Selling Your Business

Debt Capital Market Update - Q1 2019

TKO Miller Debt Capital Market Analysis 

  • Leverage multiples remain at peak levels in M&A transactions due to an aggressive lending environment
  • Leverage multiples, as measured by Total Debt/EBITDA increased from 3.5x in 2012 to 3.9x in 2018 (as depicted in the graph below)
  • The low cost of debt will fuel aggressive growth initiatives for both strategic and financial buyers (i.e. greater ability to fund acquisitions)
  • The debt market is a key underlying driver of M&A valuations; valuations will decrease when leverage multiples fall and the cost of debt increases
  • Transactions will see increasing equity contributions in response to lower debt multiples and rising purchase price multiples compared to 2017 levels (as depicted in the graph below)
  • TKO Miller projects leverage conditions to remain highly supportive over the coming 9-15 months, but trade tariffs with China, a global economic downturn, or uncertain political conditions are capable of shifting conditions back to historical levels

Total Debt/EBITDA Multiples 

Debt and Equity Contribution by Year 

TKO Miller Recent Debt Financing Transaction 

TKO Miller Served as the Exclusive Debt Advisor for Oneida Airport Hotel Corporation 

Steve Yahnke
By Steve Yahnke
on Mar 27, 2019 7:05:00 AM
   
Debt Capital Market Update - Q1 2019

TKO Miller Debt Capital Market Analysis 

  • Leverage multiples remain at peak levels in M&A transactions due to an aggressive...
Steve Yahnke
By Steve Yahnke
on Mar 27, 2019 7:05:00 AM
An M&A advisor will scare away my buyer, complicate things, and cost me a lot of money. If you think any of these things - you’re wrong

It is shocking how often we hear this from Sellers.  Nothing could be further from the truth for all three of these ideas,...

Timothy Oleszczuk
By Timothy Oleszczuk
on Mar 26, 2019 7:05:00 AM
Flexible Packaging Newsletter - Q1 2019

TKO Miller Market Analysis 

  • The Flexible Packaging Industry continued its strong growth trajectory in 2018 with an overall...
Joe Froehlich
By Joe Froehlich
on Feb 19, 2019 8:16:39 AM
Using Your Neighbor's Valuation is a Lot Like Borrowing Their Shoes

I will give you a minute to get over the "ewww" factor involved in wearing someone else's shoes. 

Tammie Miller
By Tammie Miller
on Feb 14, 2019 7:05:00 AM
How To Evaluate An Out-of-the-Blue Offer To Buy Your Business

Let's say you are running your business, just doing your thing, and out of nowhere you are contacted by a...

Tammie Miller
By Tammie Miller
on Jan 15, 2019 8:45:00 AM
7 Things That Will Change the Way You Look at Investment Bankers

Sometimes I feel like an investment banker or M&A advisor is one of those universally disliked occupations.  We are usually...

Tammie Miller
By Tammie Miller
on Dec 5, 2018 1:33:00 PM
5 Ways To Determine The Right Timing For Your Client’s Business Sale

The decision to sell a business is rarely made in an instant.  It is usually a process.  It can involve several days of yes,...

Tammie Miller
By Tammie Miller
on Nov 29, 2018 7:41:00 AM
An M&A Advisor Will Not Muddy Your Sale Transaction

Here's the sad, sad movie that I get to see all the time: a business owner, that I have talked to, calls me to tell me that...

Tammie Miller
By Tammie Miller
on Nov 14, 2018 8:28:15 AM
All That Crazy Sh%t You Run Through Your Business - Your Business Broker Doesn't Care

Business owners are a funny bunch. They are almost universally type-A personalities and are stubbornly proud. There is a...

Tammie Miller
By Tammie Miller
on Nov 11, 2018 7:21:00 AM
Quality of Earnings Reports as Part of a Sale Transaction: The Who, The What and The Why

As part of the preparation for a potential sale of your business, it is important to be aware of all the steps that may...

Aaron Cranfill
By Aaron Cranfill
on Oct 31, 2018 8:19:00 AM

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