The multiples being asked for modern financial planning practices have firmed this year.
Here are some recent successful offers and acceptances we have seen:
- 3.15 times RR. FP Sydney
- 2.75 times (mature risk book) of RR Perth
- 3.4 times RR (pure FP) in Brisbane
- 3.0 times RR. FP in Adelaide. Under offer
- 3.0 times RR. Pure risk FNQ. Under offer
There are some interesting changes in the sale of businesses since Christmas 2023. I thought I would share that information with you.
New buyers have moved into the market.
Nationally KM has many 100’s of new and potential acquirers registered with us. There is a real competitive appetite for acquisitions at present.
There are more buyers than sellers.
As people discover they have extra capacity they are looking to acquire businesses to effect efficiencies and maintain ROI. Scarcity increases values, doesn’t it?
The buyers we talk to are generally cashed up not having to rely on “subject to finance” conditions.
We suggest asking for conditions that have no recourse to the “subject to finance” request when selling.
Risk books are back in vogue.
The prevailing thought is that risk clients stick.
Businesses in the range of $200K – $950K of annual income are in the sweet spot for acquirers.
This means vendors can look to achieve $600K to $3M or more as a payout. The percentages asked for up front are always fertile ground in negotiations, aren’t they?
If there was genuine interest from cashed-up buyers with the right cultural fit it would be in your interest to discuss your options with them, wouldn’t it?
What do you think?
Best wishes
Jim
0408 520 453
jim@knowledgemaster.com.au
P.S. Knowledgemaster has keen buyers for risk databases and businesses. Even small segments of clients you would like to see looked after. Call me today on 0408 520 453 for more information. Thank you.