While there is no question that dental M & A activity is increasing “across the board”, there are differences in what the selling price (in terms of PPM — price per multiples) can be depending on the segment the dental company is a part of. In the June 6th Dental Fax Weekly published by The Anaheim Group (subscribe at www.dentalfax.com), the dental segments are currently selling at the highest PPM are software and publishing (approximately 3x on average) while labs are the lowest (0.7). Manufacturing is a solid 2.2x.
M & A Definition: “Trailing Twelve Months” (TTM)
TTM is used in the finance world as a measurement of a company’s financial health. Simply put, it is a calculation of the income for the twelve month period PRIOR to a company report (quarterly or interim). Why is it needed or used? Analysts sometimes want to determine this figure because a partial or interim report doesn’t represent a full year and depending on when during the year the report comes out, the data contained can depict unrepresentative (or “skewed”) numbers (i.e. higher sales at holiday times). To clarify a bit more, relevant to the M & A world, TTM is determined to show either the most recent 12 months of a company’s business or the last 12 months before an event like an acquisition. An example of a formula that is used to determine TTM is:
Most Recent Quarter(s) + Most Recent Year – The Corresponding Quarter(s) 12 Months BEFORE the Most Recent Quarter(s)