For parties on both sides of the table, valuation is one of the most important aspects of a deal. If the price is too low, the seller will likely be dissatisfied and seek a new buyer or investor; if the price is too high, the buyer may overpay and not see the desired return.
Despite the DCFs, multiples, and comps that are used to try and ascribe a price tag to a business, there are many qualitative factors that must be incorporated into valuation. As a result, understanding the most recent valuation techniques and trends is critical to finding the right price and leaving both parties satisfied. Combining Axial’s own data, survey results, and external research, we have identified some of the predictions for valuations trends for 2013. Based on many of these trends, valuations look like they may be on the rise, but survey respondents seem to remain cautious about such growth.