The average price that insurance brokers who have sold their businesses over the past two years have achieved is 1.6 times turnover, according to PricewaterhouseCoopers (PWC).
PWC corporate finance director Will Bridger said that for those brokers valued on an earnings before interest and tax (EBIT) measure the average was 10.9 times.
Bridger said brokers thinking of selling should understand the realities of negotiating a sale. He said selling a business takes up management time, can be a distraction from the core business and puts the business under scrutiny.
He warned brokers that “valuation does not necessarily equal price”.
He said brokers looking to sell should “accentuate the positives and mitigate the risks from the weaknesses” when negotiating with potential buyers.
