Anyone ever heard or used PeerComps.com? Is the data good/bad?
July 28, 2021
by an investor from University of Texas at Austin in Austin, TX, USA
They specialize in the valuation of small to mid-market businesses for mergers & acquisitions, Membership is $600 p/y. 100 new comps are added each month. Participating SBA lenders are given access to the data for their internal use.
from Wake Forest University in Winston-Salem, NC, USA
As it pertains to Net Working Capital (a favorite topic on SearchFunder), PeerComps includes normal inventory but explicitly excludes AR and AP in the Price calculation, so those multiples exclude AR/AP (or the price derived is before any AR/AP is added to the equation). DealStats is a mixed bag. You have to look at the data from the "All available fields" download to see whether NWC was included in your data set or not. It varies by industry and mostly by size -- as smaller transactions (<$5mm) typically do not include working capital and larger (>$5mm) typically do include it. Just be careful not to mix and match.
Thought you all might find this interesting (sorry, looks better as a table, but the table doesn't stay intact):
PeerComps (medians)
All Transactions
Revenue $1.1 mm
Price $650k
Count 13.1k
<$10 mm rev Transactions
Revenue $1.08 mm
Price $650k
Count 12.9k
DealStats (medians)
All Transactions
Revenue $938k
Price $497k
Count 41k
<$10 mm rev Transactions
Revenue $550k
Price $250
Count 31k
from Oklahoma State University in Memphis, TN, USA
I sometimes. use PeerComps. Its unique feature is that the data is 100% received from SBA lenders on closed deals involving SBA loans. "Theoretically", that might make the data a little cleaner than other databases with broader inputs. They are often used by SBA lenders in responding to opoortunities before the required business valuation is ordered by the lender.
I have a couple of times had a lender question the valuation of a deal in the vertical I work in (lawn & landscape-related) based on unadjusted multiples that don't make sense for the businesses I am working with. Part of that phenomenon is caused by the age of the data, part by the size of the business, part by the market involved and often by the SIC/NAICS codes not being specific enough to narrow the comps to truly similar businesses. For example a lawn care business might be a residential mowing business that would trade at a very low multiple or it could be a fertilization and weed control business that would trade at a considerably higher multiple or a commercial landscape maintenance business that would trade at a different multiple yet. Sometimes, you can tell the difference by examining individual comps, but more often, not.
I like DealStats in most cases because (1) its deals have a broader size range (2) it is a little easier to evaluate the under;ying data. (a;lthough the SIC/NAICS issue doesn't goi away) and (3) I am familiar with the data scrubbing process they use since I contribute data to that database.
Ultimately, the market will set the real multiple.