🌟 Editor's Note
Although the number of acquisitions in digital marketing agencies fell by 7% YoY, the exit multiple moved from 3.1X to 3.9X
The biggest reason was fewer deals were available to get done (supply) while demand (other agencies, ETA - entrepreneurship through acquisition, PE funds) remained steady.
3 important takeaways from our data:
Exit multiples are higher (4.1X vs 3.4X) for companies with lower than 19% customer and revenue churn in the last 18 months
Agencies with 10-25 employees formed the biggest part of the acquisitions pool, followed by over 50 employees. Studios (<10 employees) are not as actively looking to sell as the deal volume has fallen over 8% YoY
EBITDA multiples are the highest of the last 4 years that we have been tracking this data as the historical averages are around 3.1X to $3.4X
The last interesting piece of data - How long did it take to get the deal done from “Hello” to “High-five”?
172 days. The highest in the last 5 years.
As always - feel free to drop me a note with questions.