Compass Report--The State of M&A

Private printing company valuations have declined approximately 20 percent since 1998. Let's say you owned a successful, $12 million, general commercial printing company in 1998, with an adjusted (normalized) EBITDA margin of 15 percent. This means you had adjusted EBITDA of $1.8 million. You decided to sell your company and engaged spirited competition from several consolidators. In the end, you selected the highest bidder, which offered six times adjusted EBITDA, or $10.8 million. Let's say you had $2.8 million in interest-bearing debt, so you and your shareholders received net cash of $8 million at closing.