Dresner Partners, Mergers Alliance partner in the US, launches its Food & Beverages 4th Quarter 2020 Review, highlighting the tenuous relationship between EBITDA margins and valuation multiples
Dresner Partners has been extremely active in advising clients in the consumer products sector, including Food & Beverage. One thing that clients are always curious about is how much their company may be worth, and one of the areas we highlight for them during that discussion is the relationship between EBITDA margin (as a percent of sales) and EBITDA multiple (the enterprise value of a company as a multiple of the company’s EBITDA). In this newsletter, Dresner takes a deeper dive into that relationship and conclude that, at least for the food ingredients sector, there is a well-established and linear relationship, and, to no one’s surprise, the enterprise value of a company as a multiple of EBITDA increases as the EBITDA margin increases.
Dresner also presents the number and value of M&A transactions in the global Food & Beverage sector for 2020, as well as for that subset of M&A deals involving an important industry participant – private equity. The newsletter includeds subsector-by-subsector analyses for public companies in the sector.