Valuing recruitment businesses requires specific understanding of the industry to ensure that suitable metrics are applied. Our track record of more than 20 years of advising on the buying and selling of recruitment businesses means that our clients benefit from our knowledge of market conditions and how business are valued in practice.
We have prepared valuation reports for the following reasons:
The accepted method for valuing recruitment business is:
EBITDA x Multiple = Enterprise Value
Enterprise Value + Cash – Debt = Equity Value
Deduction of debt is a crucial aspect of valuation and must not be overlooked. Factoring and Invoice Discounting is generally treated as debt, although there may be scope for negotiation.
Factors which Impact Value
Valuations can be impacted by a wide range of factors including:
Knowing how a business compares to its peers and to businesses which may have already been acquired will also impact on valuation.
In addition to these business-specific factors, overall market conditions and sentiment towards the recruitment sector will impact on valuation.
We tailor each business valuation to our client’s specific requirements. Reports range from full valuations to guideline valuations, which are often appropriate as a first step.