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Discover the latest trends in M&A valuation with KNAV’s 2024 PPA Study, offering comprehensive insights into the allocation of purchase consideration across key industries. This report analyzes 465 transactions completed between January 1, 2023, and December 31, 2023, providing invaluable data on how companies allocate purchase consideration to goodwill, intangible assets, and contingent considerations.

Key Findings:

• Goodwill and Intangible Assets:
  • On average, 47% of purchase consideration was allocated to goodwill, with the real estate sector leading in goodwill percentages.
  • Intangible assets accounted for 41% on average, with the healthcare sector seeing the highest intangible asset allocation.
• Contingent Consideration Trends:
  • 28% of transactions included contingent consideration, marking an increase from the previous year. This reflects a growing reliance on performance-based payouts to bridge valuation gaps between buyers and sellers.
• Industry Activity:
  • Industrials and information technology sectors recorded the highest M&A activity, consistent with trends from 2023.
• Deal Size Distribution:
  • Mid-market and smaller deals dominated the M&A landscape, with 268 of the 465 analyzed transactions falling under the $250 million threshold.

This study serves as a crucial resource for valuers, auditors, and regulators, providing actionable insights to help navigate complex business combinations. Stay ahead in the evolving M&A landscape by understanding the drivers behind valuation trends and how they impact post-transaction outcomes.

Download the full report to explore industry-specific allocations, trends in contingent consideration, and the implications for stakeholders in the M&A space.

Download PDF for detailed insight