Q2 2019 M&A Market Trends from Bizbuysell Insight Report

Bizbuysell.com’s National Business-for-Sale Trends and Q2 2019 Transaction Activity Report was recently published and we wanted to share with you a quick synopsis of the data. 

Bizbuysell.com’s Transaction Activity Report is one of the most insightful reports on the state of the market and includes the aggregate results of thousands of small business transactions nationwide during the present year. 

Here are the Highlights: 

Continued Strong Sales Activity: Business sales are down 9.8% compared to 2018, but continue to be very strong relative to the past decade. So far, 2019 is the second most active business-for-sale market since BizBuySell started tracking data in 2007. In 2018, Calder Capital/Small Business Deal Advisors (SBDA) closed 18 transactions all year. Thus far in 2019, we have closed 17 transactions and are on track to broadly beat last year’s company record. We continue to witness strong interest from sellers and buyers in getting transactions to the finish line.

Median Revenue of Sold Businesses: The median revenue of all sold businesses rose 14.3% to $601,380, the highest mark on record. Much of that growth can be attributed to the retail and service industries, where the median revenue increased by 20% and 17% respectively compared to Q2 2018. 

Industry Breakdown: The service and manufacturing sectors appear to be leading the way and driving an increase in sale prices. For prospective buyers, the median asking price of businesses listed for sale in Q2 2019 increased 4.8% as a whole but was led by manufacturing and service businesses, where asking prices rose 6% and 4%, respectively. 

Thus far in 2019, the Calder/SBDA breakdown of sold businesses looks like this: 

Manufacturing: 41% 
Service: 18% 
Restaurant: 18% 
Retail: 12% 
Distribution: 6% 
Construction: 6% 

This does not mimic the national scene, which is dominated by Service, Restaurant and Retail transactions, however, most of Calder’s focus in recent years has been industrial and manufacturing, hence the outsized performance in that general industry. 

Deal Sizes: Most transactions that are reported to bizbuysell.com are smaller in nature, with the median sale price being $270,000. 13% of businesses closed for prices higher than $1MM. Owners of businesses with values $1MM+ experienced a longer sales process (around 200 days) but generally received a final sale price closer to asking price than smaller business owners. The average cash flow multiple for all sold businesses was 2.37x. The average cash flow multiple for businesses that sold for $1MM+ was 3.61x.

Market Outlook: “As we move closer to 2020, all eyes will turn to the election cycle and those in the small business community will want to pay attention to how the candidates view important issues like tariffs, taxes, minimum wage, healthcare, and more.”

Perennial political turmoil, concern over the trade war and the coming election are likely to continue to cast a shadow on the coming year, however, Calder/SBDA continues to feel very good about the West Michigan and Northern Indiana markets. Businesses are generally showing strong profits, lenders are eager to finance and buyers remain eager to find great businesses.

About the BizBuySell Insight Report
The BizBuySell Insight Report is a nationally-recognized economic indicator that tracks the health of the U.S. small business economy. Each quarter, BizBuySell analyzes sales and listing prices of small businesses across the United States based on approximately 50,000 businesses for sale and those recently sold, reporting changes in closed transaction rates, valuation multiples and other economic indicators for the small business transaction market. Closed transactions are reported to BizBuySell.com on a voluntary basis by business brokers nationwide. Each report includes real small business data on over 70 major U.S. markets and across 65 small business industries.

BizBuySell is the largest business for sale marketplace online, receiving over a million visitors a month. Since 1996, BizBuySell has offered tools that make it easy for business owners and brokers to sell a business, and potential buyers to find the business of their dreams. The website also features an extensive franchise directory as well as an easy-to-use business valuation tool.

Scroll to Top