market pulse report second quarter 20151 market pulse report second quarter 2015 scott bushkie, cbi,...
TRANSCRIPT
![Page 1: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/1.jpg)
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Market Pulse ReportSecond Quarter 2015
Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair
Lisa Riley, Ph.D., CBI, IBBA Marketing Chair
Craig Everett, Ph.D. Director, Pepperdine Private Capital Markets Project
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This research was made possible with the support of the International Business Brokers Association (IBBA) and M&A
Source.
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ACKNOWLEDGEMENTS
We’d also like to thank the following people at The GraziadioSchool of Business and Management for their contributions:
David M. Smith, Ph.D.Interim Dean
John K. Paglia, Ph.D.Associate Dean, Associate Professor of Finance
Cynthia ChiltonDirector of Marketing
Irina ShaykhutdinovaResearch Associate
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I. About the Market Pulse Report……….……….…………........5
II. Current Business Environment……………………….…..……7
III. Business Transactions Closed in the Last 3 Months……….14
IV. Business Expectations………………………………….....…..84
V. About the respondents………………..….………………..…..87
Outline
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The International Business Brokers Association (IBBA) and M&A
Source, in partnership with Pepperdine Private Capital Markets
Project, have set a goal to provide quality information on a
quarterly basis in order to become the go-to source for Main
Street and Lower Middle Market transactions. The “Market
Pulse Report” gives you timely and accurate data to help you
build and maintain a successful and sustainable business.
I.AbouttheMarketPulseReport
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• 25 questions• Invited participants were members of the
International Business Brokers Association (IBBA),IBBAAffiliates/Chapters, and/or M&A Source
• 249 completed responses• Responses collected from July 1 to July 15, 2015
AbouttheSurvey
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II. BusinessTransactionsClosedintheLast3Months
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BusinessTransactions that WereClosedintheLastThreeMonthsbyDealSize
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dealsvaluedunder$499,999
Dealsvaluedfrom$500,000to$999,999
Dealsvaluedfrom$1million to$1.99million
Dealsvaluedfrom$2million to$4.99million
Dealsvaluedfrom$5million to$50million
Wholesample 47% 17% 15% 10% 11%
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NumberofBusinessTransactionsClosedbyRespondentsintheLast3Months
Numberofresponses=145
0
10
20
30
40
50
60
70
80
90
1 2 3 4 5 6 >10Number ofRespondents 90 33 10 6 3 2 1
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ChangeintheNumberofNewClientsbyDealSizeinTheLast3Months
Dealsize Greatlydecreased Decreased Stayed
thesame Increased Greatlyincreased
Score(1to5)
Dealsvaluedunder$499,999 4% 10% 45% 38% 3% 3.3
Dealsvaluedfrom$500,000to$999,999 1% 9% 41% 45% 4% 3.4
Dealsvaluedfrom$1millionto$1.99million 3% 13% 43% 38% 4% 3.3
Dealsvaluedfrom$2millionto$4.99million 5% 9% 48% 33% 5% 3.2
Dealsover$5million 4% 10% 45% 37% 4% 3.3
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PercentageofTransactionsTerminatedwithoutClosingintheLastThreeMonths
53.3%
46.7%Terminated
Closed
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Was it Buyer’s or Seller’s Market intheLast3Months?
Number ofresponses 122 104 103 78 81
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dealsvaluedunder$499,999
Dealsvaluedfrom$500,000to$999,999
Dealsvaluedfrom$1million to$1.99million
Dealsvaluedfrom$2million to$4.99million
Dealsvaluedfrom$5million to$50million
Buyer'smarket 62% 56% 42% 37% 22%
Seller'smarket 38% 44% 58% 63% 78%
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ComparedtotheFirstHalfof2014,RespondentsHave
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
more same fewercloseddeals/transactions 35% 40% 26%
listings/engagements 54% 31% 15%
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ComparedtotheFirstHalfof2014,FinancingDealsHasBeen
0%10%20%30%40%50%60%70%80%90%100%
easier similar tougherWholesample 28% 62% 11%
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BusinessTransactionsofAllSizes,Comparison
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MedianTimetoCloseaDeal(Months)
0
1
2
3
4
5
6
7
8
9
10
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50M
5
6
8
9
8
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MedianSDEMultiplePaid
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50M
2.0
2.5
3.03.3
4.5
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MedianEBITDAMultiplePaid
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50M
2.5
3.0
3.5
4.0
5.0
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MultipleType
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50MSDEincluding workingcapital 22.3% 9.8% 34.3% 12.0% 3.8%
SDEnotincluding workingcapital 69.6% 63.4% 28.6% 28.0% 3.8%
EBITDAincluding workingcapital 1.8% 12.2% 8.6% 32.0% 30.8%
EBITDAnotincluding workingcapital 5.4% 12.2% 25.7% 16.0% 42.3%
TTMEBITDAincluding workingcapital 0.9% 0.0% 2.9% 8.0% 15.4%
TTMEBITDAnotincluding workingcapital 0.0% 2.4% 0.0% 4.0% 3.8%
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BuyerType
0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%100.0%
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50M1sttimeindividual 57.0% 49% 44% 20% 4%individualwhoowned abusiness 23.4% 28% 34% 24% 0%existingcompany/strategicbuyer 18.7% 23% 19% 36% 38%PEfirm- Platform 0.0% 0% 0% 16% 38%PEfirm- Add-on 0.0% 0% 0% 4% 12%Other 0.9% 0% 3% 0% 8%
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#1Reason forSeller to Go to Market
0%
20%
40%
60%
80%
100%
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50MRecapitalization 1% 5% 0% 0% 27%Burntout 21% 8% 9% 20% 4%Familyissues 6% 15% 9% 4% 4%Health 6% 5% 6% 4% 8%Newopportunity 14% 13% 19% 16% 8%Relocation/moving 7% 0% 0% 4% 0%Retirement 39% 51% 56% 52% 31%Unsolicitedoffer 0% 0% 0% 0% 4%Other 7% 3% 0% 0% 15%
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#1MotivationforBuyer
0%10%20%30%40%50%60%70%80%90%100%
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50MBuyingajob 53% 54% 38% 20% 8%BetterROIthanotherinvestment 10% 8% 19% 24% 19%Verticaladd-on 8% 13% 13% 20% 15%Horizontaladd-on 18% 21% 19% 24% 42%Other 10% 5% 13% 12% 15%
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FinancingStructure
0%10%20%30%40%50%60%70%80%90%100%
<500K 500K- 1M 1M- 2M 2M- 5M 5M- 50MBuyersequity 62% 40% 35% 36% 36%
Seniordebt 22% 45% 50% 33% 41%
Sellerfinancing 12% 11% 12% 18% 13%
Earnout 1% 3% 3% 12% 4%
Sellerretained equity 0% 0% 0% 1% 6%
Other 2% 0% 0% 0% 0%
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II-I BusinessTransactionsValuedunder$499,999
NumberofClosedTransactions:112
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TimetoClose
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
<1month
1month
2months
3months
4months
5months
6months
7months
8months
9months
10months
11months
12months
1.1-1.5years
1.6- 2years
>2years
Dealsunder500K 1% 5% 19% 17% 4% 7% 14% 4% 4% 4% 5% 1% 7% 6% 1% 1%
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Industry
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Restaurants Services-personal
Businessservices
Consumergoods& Retail
Healthcare&biotech
Wholesale&distribution
Manufact. Construction&engineering
Informationtechnology
Other
Dealsunder500K 24% 19% 13% 11% 9% 7% 3% 2% 2% 11%
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SDEMultiplePaid
Numberof responses:103
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0.5 0.75 1 1.25 1.5 1.75 2 2.25 2.5 2.75 3 3.25 3.75 4 5 8.25Dealsunder 500K 1% 1% 9% 6% 4% 8% 24% 18% 8% 7% 8% 1% 1% 2% 1% 2%
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EBITDAMultiplePaid
Numberof responses:8
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1.25 1.5 1.75 2 3 3.75 4Dealsunder 500K 13% 13% 13% 13% 25% 13% 13%
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MultipleType
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SDEincluding workingcapital
SDEnotincludingworkingcapital
EBITDAincludingworkingcapital
EBITDAnotincludingworkingcapital
TTMEBITDAincludingworkingcapital
Dealsunder 500K 22.3% 69.6% 1.8% 5.4% 1%
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BuyerType
57.0%23.4%
18.7%
0.9% 1sttimeindividual
individualwhoownedabusiness
existingcompany/strategicbuyer
Other
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#1Reason forSeller to Go to Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Retirement Burnt out New/betteropportunity
Relocation/moving
Familyissues Health Recapitalization
Other
Dealsunder 500K 39% 21% 14% 7% 6% 6% 1% 7%
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BuyerLocation(Distance)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within 20miles within 50miles within 100miles morethan100milesDealsunder 500K 54% 15% 9% 21%
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BuyerLocation(Global)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within city within state within country international buyerDealsunder 500K 47% 28% 21% 4%
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#1MotivationforBuyer
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Buyingajob Horizontal add-on Verticaladd-on Better ROIthanotherinvestment
Other
Dealsunder 500K 53% 18% 8% 10% 10%
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FinancingStructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Buyersequity Seniordebt Sellerfinancing Earnout OtherDealsunder 500K 62% 22% 12% 1% 2%
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II-II BusinessTransactionsValuedfrom$500,000to$999,999
NumberofClosedTransactions:41
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TimetoClose
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2months 3months 4months 5months 6months 7months 8months 10months 12months 1.1- 1.5years
>2years
Dealsfrom$500Kto$1M 7% 12% 22% 7% 15% 10% 2% 5% 7% 5% 7%
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Industry
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Services-personal
Wholesale&distribution
Restaurants Businessservices
Construction&engineering
Healthcare&biotech
Consumergoods& Retail
Basicmaterials&energy
Manufact. Other
Dealsunder500K 15% 15% 12% 10% 10% 10% 7% 5% 2% 15%
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SDEMultiplePaid
Numberof responses:30
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1.25 1.75 2 2.25 2.5 2.75 3 3.25 3.5 3.75 4 4.5 5Dealsfrom$500Kto$1M 3% 13% 20% 7% 13% 7% 7% 7% 3% 3% 3% 7% 7%
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EBITDAMultiplePaid
Numberof responses:11
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1 2.25 2.75 3 3.25 3.75 4Dealsfrom$500Kto$1M 18% 18% 9% 9% 9% 18% 18%
![Page 41: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/41.jpg)
41
MultipleType
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SDEincluding workingcapital
SDEnotincludingworkingcapital
EBITDAincludingworkingcapital
EBITDAnotincludingworkingcapital
TTMEBITDAnotincluding working
capitalDealsfrom$500Kto$1M 9.8% 63.4% 12.2% 12.2% 2.4%
![Page 42: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/42.jpg)
42
BuyerType
48.7%
28.2%
23.1%
1sttimeindividual
individualwhoownedabusiness
existingcompany/strategicbuyer
![Page 43: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/43.jpg)
43
#1Reason forSeller to Go to Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Retirement Familyissues New/betteropportunity
Burnt out Health Recapitalization Other
Dealsfrom$500Kto$1M 51% 15% 13% 8% 5% 5% 3%
![Page 44: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/44.jpg)
44
BuyerLocation(Distance)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within 20miles within 50miles within 100miles morethan100milesDealsfrom$500Kto$1M 33% 33% 13% 21%
![Page 45: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/45.jpg)
45
BuyerLocation(Global)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within city within state within countryDealsfrom$500Kto$1M 31% 46% 23%
![Page 46: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/46.jpg)
46
#1MotivationforBuyer
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Buyingajob Horizontal add-on Verticaladd-on Better ROIthanotherinvestment
Other
Dealsfrom$500Kto$1M 54% 21% 13% 8% 5%
![Page 47: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/47.jpg)
47
FinancingStructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seniordebt Buyersequity Sellerfinancing EarnoutDealsfrom$500Kto$1M 45% 40% 11% 3%
![Page 48: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/48.jpg)
48
II-III BusinessTransactionsValuedfrom$1Millionto$1.99Million
NumberofClosedTransactions:35
![Page 49: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/49.jpg)
49
TimetoClose
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
3months 4months 5months 6months 7months 8months 9months 10months
11months
12months
1.1- 1.5years
1.6- 2years
>2years
Dealsfrom$1Mto$2M 17% 3% 11% 11% 6% 3% 6% 3% 3% 9% 14% 9% 6%
![Page 50: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/50.jpg)
50
Industry
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Businessservices
Manufact. Consumergoods&Retail
Construction&
engineering
Wholesale&distribution
Healthcare&biotech
Services-personal
Informationtechnology
Services-financial
Basicmaterials&energy
Restaurants Other
Dealsfrom$1Mto$2M 17% 14% 14% 9% 6% 6% 6% 6% 3% 3% 3% 14%
![Page 51: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/51.jpg)
51
SDEMultiplePaid
Numberof responses:22
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1 2.5 2.75 3 3.25 3.5 4 5 6Dealsfrom$1Mto$2M 5% 9% 14% 32% 18% 5% 5% 9% 5%
![Page 52: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/52.jpg)
52
EBITDAMultiplePaid
Numberof responses:13
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1 1.25 2 2.75 3 3.5 3.75 4 4.25 4.5 8.25Dealsfrom$1Mto$2M 8% 8% 8% 8% 15% 15% 8% 8% 8% 8% 8%
![Page 53: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/53.jpg)
53
MultipleType
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SDEincluding workingcapital
SDEnotincludingworkingcapital
EBITDAincludingworkingcapital
EBITDAnotincludingworkingcapital
TTMEBITDAincludingworkingcapital
Dealsfrom$1Mto$2M 34% 29% 9% 26% 3%
![Page 54: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/54.jpg)
54
BuyerType
44%
34%
19%
3.1% 1sttimeindividual
individualwhoownedabusiness
existingcompany/strategicbuyer
Other
![Page 55: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/55.jpg)
55
#1Reason forSeller to Go to Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Retirement New/betteropportunity
Burnt out Health Familyissues
Dealsfrom$1Mto$2M 56% 19% 9% 6% 9%
![Page 56: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/56.jpg)
56
BuyerLocation(Distance)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within 20miles within 50miles within 100miles morethan100milesDealsfrom$1Mto$2M 34% 22% 3% 41%
![Page 57: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/57.jpg)
57
BuyerLocation(Global)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within city within state within country international buyerDealsfrom$1Mto$2M 34% 34% 28% 3%
![Page 58: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/58.jpg)
58
#1MotivationforBuyer
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Buyingajob Horizontal add-on Better ROIthanotherinvestment
Verticaladd-on Other
Dealsfrom$1Mto$2M 38% 19% 19% 13% 13%
![Page 59: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/59.jpg)
59
FinancingStructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seniordebt Buyersequity Sellerfinancing EarnoutDealsfrom$1Mto$2M 50% 35% 12% 3%
![Page 60: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/60.jpg)
60
II-IV BusinessTransactionsValuedfrom$2Millionto$4.99Million
NumberofClosedTransactions:25
![Page 61: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/61.jpg)
61
TimetoClose
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2months 3months 4months 5months 6months 7months 9months 10months 12months 1.1- 1.5years
>2years
Dealsfrom$2Mto$5M 4% 4% 16% 4% 16% 4% 4% 8% 8% 16% 16%
![Page 62: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/62.jpg)
62
Industry
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Manufact. Construction&engineering
Wholesale&distribution
Healthcare&biotech
Services-personal
Basicmaterials&energy
Informationtechnology
Business services Consumer goods&Retail
Dealsfrom$2Mto$5M 24% 24% 16% 8% 8% 8% 4% 4% 4%
![Page 63: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/63.jpg)
63
SDEMultiplePaid
Numberof responses:10
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1.75 2.5 2.75 3 3.5 3.75 4 5.75Dealsfrom$2Mto$5M 10% 10% 10% 20% 10% 20% 10% 10%
![Page 64: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/64.jpg)
64
EBITDAMultiplePaid
Numberof responses:15
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2 2.25 3.25 3.5 4 4.25 4.5 5.5 6 8Dealsfrom$2Mto$5M 7% 7% 13% 13% 13% 20% 7% 7% 7% 7%
![Page 65: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/65.jpg)
65
MultipleType
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SDEincludingworkingcapital
SDEnotincludingworkingcapital
EBITDAincludingworkingcapital
EBITDAnotincluding working
capital
TTMEBITDAincluding working
capital
TTMEBITDAnotincluding working
capitalDealsfrom$2Mto$5M 12.0% 28.0% 32.0% 16.0% 8% 4.0%
![Page 66: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/66.jpg)
66
BuyerType
20.0%
24.0%36.0%
16.0%4.0%
1sttimeindividual
individualwhoownedabusiness
existingcompany/strategicbuyer
PEfirm- Platform
PEfirm- Add-on
![Page 67: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/67.jpg)
67
#1Reason forSeller to Go to Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Retirement Burnt out New/betteropportunity
Health Familyissues Relocation/moving
Dealsfrom$2Mto$5M 52% 20% 16% 4% 4% 4%
![Page 68: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/68.jpg)
68
BuyerLocation(Distance)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within 20miles within 50miles morethan100milesDealsfrom$2Mto$5M 24% 28% 48%
![Page 69: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/69.jpg)
69
BuyerLocation(Global)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within city within state within countryDealsfrom$2Mto$5M 20% 40% 40%
![Page 70: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/70.jpg)
70
#1MotivationforBuyer
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Better ROIthanotherinvestment
Horizontal add-on Verticaladd-on Buyingajob Other
Dealsfrom$2Mto$5M 24% 24% 20% 20% 12%
![Page 71: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/71.jpg)
71
FinancingStructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Buyersequity Seniordebt Sellerfinancing Earnout Sellerretained equityDealsfrom$2Mto$5M 36% 33% 18% 12% 1%
![Page 72: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/72.jpg)
72
II-V BusinessTransactionsValuedOver$5 Million
NumberofClosedTransactions:26
![Page 73: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/73.jpg)
73
TimetoClose
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2months 3months 4months 5months 6months 7months 9months 10months
11months
12months
1.1- 1.5years
1.6- 2years
>2years
Dealsfrom$5Mto$50M 4% 8% 8% 8% 15% 8% 8% 12% 4% 4% 12% 8% 4%
![Page 74: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/74.jpg)
74
Industry
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Manufact. Businessservices
Wholesale&distribution
Services-financial
Consumer goods&Retail
Informationtechnology
Construction&engineering
Healthcare&biotech
Other
Dealsfrom$5Mto$50M 35% 15% 15% 8% 8% 8% 4% 4% 4%
![Page 75: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/75.jpg)
75
SDEMultiplePaid
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
4 5Dealsfrom$5Mto$50M 50% 50%
![Page 76: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/76.jpg)
76
EBITDAMultiplePaid
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1 3 3.5 3.75 4 4.25 4.5 4.75 5 5.5 6 6.25 6.5 6.75 7.5 8.5Dealsfrom$5Mto$50M 4% 4% 4% 4% 4% 4% 8% 13% 8% 4% 13% 8% 8% 4% 4% 4%
![Page 77: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/77.jpg)
77
MultipleType
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SDEincludingworkingcapital
SDEnotincludingworkingcapital
EBITDAincludingworkingcapital
EBITDAnotincluding working
capital
TTMEBITDAincluding working
capital
TTMEBITDAnotincluding working
capitalDealsfrom$5Mto$50M 4% 4% 31% 42% 15% 4%
![Page 78: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/78.jpg)
78
BuyerType
3.8%
38%
38.5%
12%8%
1sttimeindividual
existingcompany/strategicbuyer
PEfirm- Platform
PEfirm- Add-on
Other
![Page 79: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/79.jpg)
79
#1Reason forSeller to Go to Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Retirement Recapitalization New/betteropportunity
Health Burnt out Familyissues Other
Dealsfrom$5Mto$50M 31% 27% 8% 8% 4% 4% 15%
![Page 80: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/80.jpg)
80
BuyerLocation(Distance)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within 20miles within 50miles within 100miles morethan100milesDealsfrom$5Mto$50M 12% 15% 15% 58%
![Page 81: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/81.jpg)
81
BuyerLocation (Global)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
within state within country international buyerDealsfrom$5Mto$50M 27% 65% 8%
![Page 82: Market Pulse Report Second Quarter 20151 Market Pulse Report Second Quarter 2015 Scott Bushkie, CBI, M&AMI, IBBA Marketing Chair Lisa Riley, Ph.D., CBI, IBBA Marketing Chair Craig](https://reader036.vdocuments.mx/reader036/viewer/2022071401/60ed94b8538a876ed7468414/html5/thumbnails/82.jpg)
82
#1MotivationforBuyer
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Horizontal add-on Better ROIthanotherinvestment
Verticaladd-on Buyingajob Other
Dealsfrom$5Mto$50M 42% 19% 15% 8% 15%
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FinancingStructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seniordebt Buyersequity Sellerfinancing Sellerretained equity EarnoutDealsfrom$5Mto$50M 41% 36% 13% 6% 4%
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IV. Expectations
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Expectationsof Business Listings /Engagementsfrom New Clients intheNext3Months
Dealsize Greatlydecrease Decrease Staythe
same Increase Greatlyincrease
Score(1to5)
Dealsvaluedunder$499,999 0.0% 5.1% 33.8% 56.6% 4.4% 3.6
Dealsvaluedfrom$500,000to$999,999 0.0% 4.2% 27.7% 63.9% 4.2% 3.7
Dealsvaluedfrom$1million to$1.99million 0.0% 3.4% 36.1% 55.5% 5.0% 3.6
Dealsvaluedfrom$2million to$4.99million 0.0% 3.2% 39.4% 52.1% 5.3% 3.6
Dealsover$5million 1.1% 5.3% 36.8% 53.7% 3.2% 3.5
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ExpectationsforBusinessValuationMultiples intheNext3Months
Dealsize Greatlydecrease Decrease Staythe
same Increase Greatlyincrease Score(1to5)
Dealsvaluedunder$499,999 0.0% 8.8% 73.7% 17.5% 0.0% 3.1
Dealsvaluedfrom$500,000to$999,999 0.8% 5.9% 72.3% 21.0% 0.0% 3.1
Dealsvaluedfrom$1million to$1.99million 0.8% 6.7% 68.9% 22.7% 0.8% 3.2
Dealsvaluedfrom$2million to$4.99million 1.0% 6.2% 68.0% 21.6% 3.1% 3.2
Dealsover$5million 0.0% 10.3% 58.8% 30.9% 0.0% 3.2
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V.AbouttheRespondents
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DetailsAbouttheRespondentsGeographicLocation
01-23-56-78-1011-1516-20more than 20
CA#
OR#
WA#
MT# ND# MN#
ID#WY#
SD#
NV#UT#
AZ#
CO#
NM#
TX#
NE#
KS#
OK# AR#
LA#MS# AL#
FL#
GA#
TN#SC#
NC#
VA#WV#KY#MO#
IL#IA#
WI#MI#
IN#OH#
MD#
PA#NJ#
NY#
ME#
NH#VT#MA#RI#
CT#
HI#AK#
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Totalnumberofresponses=249*Numberismorethannumberofrespondents asmanyrespondentsoverlapinto2or3areas
DetailsAbouttheRespondentsTypicalSizeofBusinessTransactions
0%10%20%30%40%50%60%70%80%90%100%
Dealsvaluedunder$499,999
Dealsvaluedfrom$500,000to$999,999
Dealsvaluedfrom$1million to$1.99million
Dealsvaluedfrom$2million to$4.99million
Dealsvaluedfrom$5million to$50million
Wholesample 50% 44% 43% 33% 34%
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DetailsAbouttheRespondentsMemberships/MultipleMemberships
49%
35%
11%
8%
7%
5%
4%
4%
4%
3%
3%
3%
3%
2%
2%
2%
1%
1%
1%
13%
0% 10% 20% 30% 40% 50% 60%
IBBA
M&ASource
CaliforniaAssociationofBusiness Brokers
AllianceofMerger&AcquisitionsAdvisors
Business BrokersofFlorida
TexasAssociationofBusiness Brokers
NewEnglandBusinessBrokersAssociation
Carolina- VirginiaBusinessBrokersAssociation
OhioBusiness BrokersAssociation
ColoradoAssociationof Business Intermediaries
ArizonaBusinessBrokersAssociation
MidwestBusinessBrokersIntermediaries
PennsylvaniaBusinessBrokersAssociation
FloridaBusinessBrokersAssociation
GeorgiaAssociationofBusinessBrokers
MichiganBusinessBrokersAssociation
NewYorkAssociationofBusinessBrokers
Mid-AtlanticBusinessBrokersAssociation
NevadaBusinessBrokersAssociation
Other(pleasespecify)
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DetailsAbouttheRespondentsWorkingExperience
3% 6% 5%
3%3%
4%
4%4%
3%4%
9%21%
8%
22%
Lessthan1year1year2years3years4years5years6years7years8years9years10years11-15years16-20years>20years
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DetailsAbouttheRespondentsProfessionalCredentials
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CBI MBA CBB M&AMI CMEA CM&AA CPA(nonactive)
CPA(active)
ABI BCB AM&AA BCI CFA ASA CMSBB Other(pleasespecify)
% 44% 27% 13% 13% 6% 5% 4% 4% 3% 3% 3% 2% 2% 2% 1% 24%
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THANK YOU!
Scott Bushkie, CBI, M&AMI, IBBA Marketing [email protected]
Lisa Riley, Ph.D., CBI, IBBA Marketing [email protected]
Craig Everett, Ph.D. Director, Pepperdine Private Capital Markets Project
http://bschool.pepperdine.edu/[email protected]