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Bloomberg reports businesses selling for 6% premium despite pandemic

Bloomberg reports businesses selling for 6% premium despite pandemic

Bloomberg’s recent article reveals surprising data for business owners considering selling:

  • Despite the disruption of Covid-19 it is a seller’s market
  • Restaurants, gyms and other corona-sensitive businesses have suffered while other sectors have thrived during the pandemic
  • The businesses that are selling are going for a premium (6% premium according to the Bloomberg article and Bizbuysell)
  • Sunbelt Business Advisors of Minneapolis, the largest seller of companies in Minnesota, has recorded a record number of closings emerging from Covid.  Sunbelt offices across the country report a similar surge in business sales.
  • Business buyer inquiries are up over 40% in Q3 2020 (Minnesota buyer inquiries). Buyer demand is up for every type of buyer, including Strategic, individual buyers and Private Equity.
  • Bank financing and other sources of capital remain strong

Strong buyer demand and ready access to capital historically create a seller’s market.   This continues to be true for business owners unless they are in the most covid-sensitive industries such as restaurants, travel and gyms.

Companies that have weathered the Covid-19 storm and have a decent outlook are not only highly “sellable” but are selling quickly and at a premium price. 

Interestingly the same business owners that have delayed selling their companies because of covid-19 are actually intensifying the seller’s market.  The number of businesses on the market has dropped while buyer demand has increased.   This can result in multiple offers and is a likely cause of the premium prices sellers are seeing.

Sunbelt is encouraging business owners that are near retirement or otherwise considering an exit to get educated on what their company is worth in today’s market.  Sunbelt offers a confidential & complimentary value range.

Chris Jones is President of Sunbelt Business Advisors of Minneapolis (www.sunbeltmidwest.com) and has 20 years of experience helping sellers and buyers of companies.

Sunbelt Business Advisors is Minnesota’s largest seller of companies. Sunbelt is the largest business brokerage firm in the world with 200 offices worldwide.