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 for the first quarter of 2022 shows that multiples on private lower middle-market transactions (between $10-250mm) in the USA averaged 7.7x on the trailing twelve months adjusted EBITDA. This was for those companies with above-average revenue growth and EBITDA margins. Companies that had performance not as attractive averaged 6.3x.
Multiples on larger deals in the $250-500mm range had average multiples of 12.0x adjusted EBITDA.
Indications are that completed deal volume in the first quarter of 2022 was down over 60% from the prior quarter. This should be expected since the two prior quarters were very active.
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.
