Valuations

An area to more closely gauge in 2022.

Video transcript

The one that we're watching a little bit more closely and say what do the capital structure or the debt levels look like. So for example, last year, if you could put four times or five times dead on a business, and that goes down to three or four, that puts a lot more downward pressure on your valuation models and what are returns going to be. And so one of the things that we'll continue watching throughout 2022 is to say, "Hey. If we do see that happen, that's going to put a little bit tension between what buyers and sellers want." A seller still believes what their friends sold their business for in 2021. That's 14 times what the number was. That's the price you're going to get. But when you can't quite get there with the change in debt levels and things like that, that could put us into a little bit of a temporary issue where there might not be quite as much buyers and sellers getting aligned.

Brett Glover

Brett Glover

National Financial Due Diligence and Deal Advisory Strategy Leader, Healthcare and Life Sciences, KPMG US

+1 214-840-8579