What justifies a high industry multiple?

There are a myriad of factors that can cause a high multiple. Listed below are some of the most common and influential:

• Overall M&A activity is accelerating
• Dramatic increase in “inbound” M&A in 2017 (foreign buyers)
• High growth expectation in the specific industry
• High growth expectation in the geographical region of business
• Growth expected from government or other intervention
• Pretax profits of more than $21 million in last 3 years
• Established more than 100 years
• Superior performance to public companies