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Valuation Multiples of Internet Company Transactions Continue
to Surge During 1999
Washington, D.C., September 10, 1999The price companies
are willing to pay to purchase Internet-related businesses continues
to be strong, according to Bond & Pecaro, a consulting firm that
specializes in Internet company valuations. The company has analyzed
224 transactions from the first half of 1999. Although the stock
prices of publicly held Internet-related businesses have pulled
back recently, the broad conclusion is that, across the board, companies
demand, and buyers continue to pay, a premium for Internet companies.
As this industry evolves at lightning speed, everyone from senior
management to shareholders, industry analysts, and individual investors
are clamoring to make sense of it all. Since publishing their initial
CyberValuation report in June, which analyzed almost 600 transactions
over the past four years, Bond & Pecaro has distributed over 2500
books to corporate America. "I've talked to a lot of people who
have inquired about the study," says partner Jeff Anderson, "There
is a real demand for a set of valuation tools for this emerging
field. Every industry establishes guidelines to compare, contrast
and identify trends across transactions. Obviously, we're working
fast and furious to stay ahead of this one."
The company's research examines four industry segments: Internet
Service Providers (ISP), portals, Internet retail and business-to-business.
The key benchmarks include valuation multiples for revenue, subscribers,
and unique monthly visitors. These "multiples" are a ratio of the
value commanded in the marketplace divided by actual performance
indicators at the time of the transaction. The report also profiles
transaction structure where available and includes abridged financial
statements for selected companies within each sector.
While the value of Internet companies appears to most of us to
be guided only by mass hubris, Bond & Pecaro illustrates that there
is a roadmap of trends and benchmarks to follow. To CFO's and other
senior management this should be welcome news. But Jeff Anderson
admits that some corporations, even major ones, are determined to
close deals without the normal valuation and quantitative analysis.
In some cases the buyers have decided that strategically they must
acquire this company, and price really isn't the greatest concern.
If you can't wait another day before making your next major acquisition
or investment, the full CyberValuation report is available for $695.
Reach Bond & Pecaro at 202-775-8870 or online at www.cybervaluation.com.
About Bond & Pecaro
Bond & Pecaro provides valuation and financial consulting services
to major players in the television, radio, cable television, media,
technology, and newspaper industries. In recent years, the firm
has focused on emerging technologies, such as new media and Internet-based
businesses. Bond & Pecaro's professionals have appraised over 3,000
media and technology concerns. Firm members have extensive experience
in market research, valuation-related tax matters, financial and
economic analysis, and litigation support |
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