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Mergers & Acquisitions in the Food Business: How did the 2002 and 2008/2009 Economic Crises Impact Corporate Valuation?

International Journal on Food System Dynamics

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Field Value
 
Title Mergers & Acquisitions in the Food Business: How did the 2002 and 2008/2009 Economic Crises Impact Corporate Valuation?
 
Creator Declerck, Francis
 
Subject market multiples; transaction market multiples; valuation; transaction; M&A; food
 
Description Transaction market multiples are widely used as benchmarks for negotiation between buyers and sellers. This research focuses on financial performance expressed as transaction market multiples of sales, EBITDA and net profit for the 2002-2009 period.The number of transactions declined much more in 2002 than in 2008 and 2009, but the value of transactions displayed the opposite trend. The 2008-2009 economic crisis impacted the valuation of food companies more than the 2002 crisis. Market multiples declined much more in 2009 than in 2002 and 2003.On average, transaction multiples are stable, even though their values on a given year are affected by economic cycles.The EV/EBITDA provides results with smaller spread than EV/ Sales and EV/net profit. The present research shows that valuations of dairy companies are quite close to the average valuations in the food business. But valuations of wines and spirits companies are a lot higher than other food business companies. Transaction market multiples at food subsector level provide more accurate tools to the stakeholders of M&A in order to avoid over-payment and financial distress.
 
Publisher CentMA
 
Contributor —
 
Date 2016-07-06
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/731
10.18461/ijfsd.v7i3.731
 
Source International Journal on Food System Dynamics; Vol 7, No 3 (2016); 183 - 195
1869-6945
 
Language eng
 
Relation http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/731/619
 
Rights Copyright (c) 2016 International Journal on Food System Dynamics