Alteris LLC tracks Mergers & Acquisitions (M&A) 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, generalized for many different types of companies of various sizes.
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-December 2018 show that valuations on private middle-market transactions in the USA continued to plateau.
TEV/Adjusted EBITDA multiples of companies in the $10-250 million segment averaged 7.1x for the year through the third quarter.
Larger transactions of companies in the $50-250 million were over three times higher multiples than Private Equity sponsored deals in the $10-50 million TEV range.
The availability of debt continues to remain high. But acquirers are structuring their deals more conservatively. More than 50% of transaction reported the use of ‘less than maximum available” debt. Senior and subordinated debt pricing continued to show compressed spreads compared to LIBOR.
Some definitions:
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA is a surrogate for cash flow.
TEV is Total Equity Value.
LIBOR is the London Interbank Offered Rate, a benchmark interest rate, set in London, that represents the interest rate at which banks lend funds to each other in the international interbank market for short term loans.
