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NEED Experienced Brokers advice- Question on multiplier used on PT company

I have 4 Physical Therapy Clinics for sale in a package deal. Profits have been trending up since inception, Total EBITDA is $2M for 2015. After 7 months on the market I got a buyer to offer for 4x EBITDA ($8M). Seller is now saying they think it should be worth 5x EBITDA. I am trying to show him that 4X EBITDA is a great offer. Any other input out there? Does anybody think 5X is possible? Suggestions? Quotes for my seller? ANY help is greatly appreciated. Thanks

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Answers (2)
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Aug 8, 2016
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United Financial LLC
Experts in Small Business Valuations
Alameda County, CA

First, I hate to answer a question with a question. Please forgive me; but what kind of valuation/pricing analysis was done on the front-end? Databases like M&A “Done Deals” and Pratt’s Stats tell the story of what values are like in real world transaction terms. That type of analysis should have indicated a reasonable range of expected values. Beyond that, in an auction process, the lack of a number of bidders probably indicates some other perceived risks from the marketplace.

Mar 29, 2016

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