As a proud member of the UK200Group, Dains Accountants is delighted to share insights from the 2024 SME Valuation Index, which reveals encouraging trends for businesses considering sales. The Index, compiled by MarktoMarket using data contributed by UK200Group members, highlights robust growth in SME valuations and signals confidence in the UK mergers and acquisitions (M&A) landscape.
Key Highlights:
Rising EBITDA Multiples: Median EBITDA multiples increased to 5.4x in 2024, up from 5.0x in 2023, underscoring improved investor confidence.
Stable Deal Volumes: Transaction volumes held steady in early 2024, with a significant uptick in activity during the third quarter.
Favourable Economic Conditions: Falling interest rates and greater political stability have contributed to a stronger foundation for M&A activity.
| Median P/E | Median EBITDA | Mean P/E | Mean EBITDA | Avg Deal Size | |
|---|---|---|---|---|---|
| Nov-24 | 6.0 | 5.4 | 6.9 | 6.7 | 6.9 |
| Nov-23 | 5.5 | 5.0 | 7.2 | 5.6 | 4.0 |
| Nov-22 | 5.9 | 4.3 | 7.2 | 5.2 | 6.3 |
| Nov-21 | 7.6 | 6.0 | 8.9 | 6.6 | 7.1 |
| Nov-20 | 7.0 | 5.4 | 8.3 | 6.0 | 4.2 |
The UK economy’s resilience, evidenced by GDP growth forecast of 1.1%, inflation set to average around 2.6% in 2025, and rising employment rates of 74.8%, has created a positive environment for business transitions.
Speaking on the findings, Roy Farmer, Partner and Head of Corporate Finance at Dains Accountants said: The increase in SME valuations reflects not just market confidence, but also the resilience and adaptability of UK businesses. Whether you’re looking to sell your business or acquire one to fuel growth, now is an opportune time to act. With favourable economic conditions and supportive policies, 2025 looks set to build on this momentum."
The SME Valuation Index offers invaluable insights for business owners, investors, and advisers exploring the opportunities of the UK M&A market. As trusted advisers in business sales, acquisitions, and succession planning, our team is here to help clients capitalise on these trends.
