Alteris LLC tracks Mergers & Acquisitions (M&A) generalized valuation and other trends/metrics from its various partners and research sources. We will periodically report on what we find here.
For more detailed information on valuations and M&A trends contact us directly.
Please note that this information is a summary of many different types of companies of various sizes in a variety of industries. The specific valuation for any individual company, for your business, may and probably will vary greatly. Each company and set of circumstances is unique and must be considered individually.
This data is collected from various sources and includes proprietary deal information from over 200 PEGs (Private Equity Groups) on $10-250mm sponsored transactions, with an average TEV near $50mm.
Alteris LLC has reviewed M&A activity in the middle market for the second quarter of 2020. This includes the months following the beginning of Covid-19 and the Pandemic.
We found there is essentially no change in valuations for the transactions under review. However there was a large reduction in deal/transaction volume. For those transactions that did occur, there was substantially less debt in the financing.
In the second quarter of 2020, valuations continued to be high. Average multiples of adjusted EBITDA were 7.4x for $10-250mm sponsored deals, as of August 2020.
Transaction/Deal volume dropped by almost 60% in Q2 2020. Total debt decreased to an average of 3.3x EBITDA.
Some definitions:
TEV means Total Enterprise Value, which is calculated as TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock – Excess Cash. TEV allows a comparison of companies with different levels of debt.
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA is a surrogate for cash flow.
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