One of the most sought-after charts of the Haig Report, even since first publishing it 10 years ago, is the national average blue sky multiples by franchise. Prior to the pandemic, you could apply these multiples to the most recent year of adjusted pre-tax profits to derive blue sky. Between 2020 and 2023, buyers began to average in years of pre- and post-pandemic profits. Today, buyers are using a wide range of valuation methodologies, which can vary down to the franchise level. We caution sellers (and buyers alike) to base their expectations on multiples alone. There are a variety of other factors that influence the overall value of your business including brand and geography. If you want to learn more about the Haig Partners national average blue sky multiples or what your business might be worth, I'd be happy to have a confidential conversation with you.
We carefully monitor the auto retail buy-sell market to assess the desirability of various franchises and overall market conditions. Our team has analyzed offers on transactions spanning hundreds of dealerships and regularly speak with leading buyers, attorneys, bankers and CPAs involved in other transactions. Our transaction experience combined with the bench of knowledge from the auto retail leaders on our team makes us one of the most trusted sources for establishing what a buyer would pay as a multiple of pre-tax profits for the blue sky of various franchises. That said, however, we stress to our clients that the multiple should be considered a baseline only. Sellers should not simply take the multiples and apply them to their current earnings to estimate goodwill. Market conditions are highly variable today, so having access to data from many other transactions that have occurred recently is essential to understand and predict value. Read more in the the Q4 2023 Haig Report®, auto retail's most trusted quarterly M&A report: https://bit.ly/3PKeio1
