M&A: average premiums in the UK 2017-2018, by industry
Average premium multiples are used to gauge the excess an acquiring company may expect to pay over the market trading value of the seller's shares. In its simplest form the calculation shows the percentage paid on top, over the value of the company being sold that an acquirer pays. Between 2017 and 2018, In the United Kingdom (UK), the average premium to four-week stock price paid for consumer staples companies almost doubled. This was far higher than the global average paid.
Premiums globally
When broken down into key markets and global regions, premiums paid to four-week stock prices became slightly more favorable to buyers. The United States, which typically has higher average premiums saw several industries including telecommunications, consumer products and services and the financial industry see notable decreases in premiums paid.
Value/EBITDA multiples
Value/EBITDA or enterprise value to earnings before interest, taxes, depreciation and amortization is a key measurement ratio used as a metric of valuing a company to an industry average. Between 2017 and 2018, a significant number of industries increased in value/EBITDA in the UK. The most significant being seen in the consumer products and services industry.
Premiums globally
When broken down into key markets and global regions, premiums paid to four-week stock prices became slightly more favorable to buyers. The United States, which typically has higher average premiums saw several industries including telecommunications, consumer products and services and the financial industry see notable decreases in premiums paid.
Value/EBITDA multiples
Value/EBITDA or enterprise value to earnings before interest, taxes, depreciation and amortization is a key measurement ratio used as a metric of valuing a company to an industry average. Between 2017 and 2018, a significant number of industries increased in value/EBITDA in the UK. The most significant being seen in the consumer products and services industry.
