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 August 2018 show that valuations on private middle-market transactions in the USA continued at a high level of 7.4x EBITDA in Q2 2018. This the same multiple as in the prior quarter.
Transaction volume decreased from 2017. It is not clear exactly what caused this but likely upcoming tax changes, uncertain trade policy and general market conditions contributed to the decline.
Equity utilization increased when compared to debt. Equity is above 50% for transaction in the $50-100 million range. The equity portion on buyouts/acquisitions in the first part of 2018 was around 42%.
The use of Rep & Warranty insurance increased into smaller transactions. In the most recent quarter, >40% of those transactions in the $25-50 million had such in such insurance.
Some definitions:
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA is a surrogate for cash flow.
TEV is Total Equity Value.
