Capital Economics, Ltd., a London-based economics research firm, is reportedly for sale. Capital Economics was founded in 1999 by Roger Bootle, a former HSBC chief economist, and has 47 employees, of which 40 are economists. Bootle, who owns 68pc of Capital Economics, reportedly has retained corporate finance firm Quayle Munro to work on a strategic review.
For the fiscal year ending April 30th 2013, Capital Economics had revenues of £15 million (US$22.5 million) and a profit before tax of £6 million (US$9 million). Revenues were up nearly 13% from the previous year’s £13.3 million. The asking price is reportedly £50 million (US$75 million), which would represent a 3.3x revenue multiple and 8.3x EBITDA multiple. Neither multiple is out of line. We estimate that Ned Davis sold for between 2.5-3x revenues and around 12-13x EBITDA. However, the challenge is finding buyers that have an appetite for investment research.