Appliance Repair Services Sector M&A Activity Part 1 (Valuation)
An extensive search through press releases, databases, and company websites revealed only the annual revenues for Serviz, Commercial Appliance Service, and Broughton Appliance Service. Multiple revenue could not be calculated because purchase prices are not published.
2017 & 2018 ANNUAL REVENUE
- The estimated annual revenue for both years is $3 Million.
Commercial Applicance Service
- The estimated annual revenue for both years is $3.7 Million.
Broughton Appliance Service
- The estimated annual revenue for both years is $641, 983 .
- The purchase price of Serviz was not published.
Commercial Appliance Service
- There was no formal public announcement of the purchase information of the company.
Broughton Appliance Service
- No significant references to the company's purchase were availed to the public.
MULTIPLE OF REVENUE
The multiple of revenue for the three companies cannot be calculated due to lack of information about their selling prices.
INSIGHTS INTO THE VALUATION OF THE COMPANIES (DIVIDENDS, CASH FLOW, AND GROWTH RATE)
The valuation of the companies could not be obtained.
To identify the companies' revenues, we specifically searched for the annual reports for the companies with the hope that we would directly obtain the revenues from here. However, the companies do not have any publicly available annual reports. We, therefore, resorted to searching for the revenues on reliable websites such as Privco and Fortune 500. These websites had no information pertaining to the companies. It was also impossible to triangulate the revenues because no information about the specific product pricing information for the companies and consumer data could be obtained from any of the websites. A final general search derived revenues from websites such as Manta and Owler. These, being the only sources that had the relevant information, were used to provide the revenues. The sources listed the revenues as "estimated annual revenues" and were considered as revenues for 2017 and 2018.
MULTIPLE OF REVENUE
Figuring out the multiple of revenue for the companies solely depended on determining the selling prices of the companies because multiple of revenue is equal to the selling price of a company divided by 12 months of revenue of the company. Our initial research approach for identifying the selling prices of the companies involved searching for the parent companies' annual reports during the purchase years. Annual reports of the parent companies usually the information about the purchase price. However, this strategy proved to be futile because the parent companies (Parts Town, Porch, and Appliances on Lakeside) do not have any available annual reports.
We then decided to switch gears and searched for specific news articles, press releases, announcements, and industry publications announcing that the companies had been acquired. These include Biz Journals and Forbes. Once again, the only news article that contained significant details was about Serviz and it also failed to mention the selling price of the company.
Finally, we consulted expert databases such as Mergent Online, Nexis Uni, and Business Source Complete which contain information about mergers and acquisitions. This information usually includes the selling price. However, these databases were pay walled and, we were, therefore, did not obtain any information on the specific companies.
One specific challenge (which explains why the information about these companies may be missing) is that these are privately held companies which do not publish financial reports of their companies. It could also be because the companies do not want to publicize their annual reports as this may make them susceptible to scrutiny.
VALUATION (Dividends, Cash flow, and Growth Rate)
Our research strategy for identifying the valuation of the companies involved first searching the companies' websites for annual reports pertaining to these financial measures. Annual reports are usually excelent and credible sources for valuation information. However, as explained above, no annual reports were obtained.
Next, we went through databases such as Crunchbase which contain information on funding for companies and reveal the companies' valuation as per the funding stages. This was a futile attempt as the value of the companies was not provided.
Our final strategy involved searching for press releases and announcements discussing the acquisitions to identify the company's worth. However, press releases did not mention the dividends, cash flow, or growth rates of the companies.