Ben Rooney has an article up today on the Wall Street Journal reporting that European tech companies are valued on lower multiples than US businesses in M&A transactions:
The amount paid for a company as a multiple of earnings before interest, taxes, depreciation and amortization, or Ebitda, for U.S.-based companies rose from 11 times in 2011 to 11.3 times in 2012. Over the same period, European multiples fell from 10.6 to 9.9, according to the report by American Appraisal, a global valuation consultancy.
In other words there’s a buying opportunity in European for global tech companies. And we should tell the world about it so that everyone comes shopping and rights this market imbalance. I might blog this data again on Monday!
As Ben points out This buying opportunity counts double for companies like Apple, Oracle, Microsoft and Cisco because they have substantial overseas cash reserves which will get taxed if they bring them back to America.