In this week’s post, we attempt to divert your attention from interest rates and banking crises by looking at recent private company transaction multiples and some implications of these measures. As detailed in the latest edition of “Mercer Capital’s Middle Market Transaction Update,” transaction activity, both in terms of deal values and volume, ended 2022 with a thud, as expected. Multiples on deals across all size tranches in the middle market (which we define as deals with total enterprise value between $10 million and $250 million) fell to close the year—implying a broad decline in private company valuations in that time. However, asset prices across most classes were susceptible to these declines, creating opportunities for prudent family business managers and directors to evaluate potential transactions in a “down” market. Family business owners should not bury their heads in the sand regarding the current environment–one of the most important facets of a successful transaction is that sellers have reasonable and informed expectations of what their business may command in the market. These reasonable and informed expectations are difficult to develop without a solid understanding of current market conditions for privately held businesses.