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.
The information available as of November 2019 show that valuations on private lower middle-market transactions between $10-250mm in the USA showed multiples averaged 7.4x the trailing twelve months adjusted EBITDA.
We are seeing multiples remain elevated than historically. But , there are decreases in less desirable industry sectors while simultaneously there are increases in more desirable industries.
Total debt varied by deal size. In the deals with a range of $10-25 million , the average was 3.1x Total Debt/EBITDA. For deals in the $100-250 million range the average was 4.6x. Senior debt pricing spreads continued at the Q2 2019 level.
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.
