U.S Middle-market private equity activity remained strong in Q2 2015 with elevated multiples holding steady. Deal multiples of 15.0x EBITDA are no longer seen as outliers, prompting data providers to increase their deal parameters to include these transactions. The continued abundance of cheap liquidity will likely keep deal prices elevated for the near term, which is good news for sellers. With strong lending competition, buyers’ required equity contributions have declined from 50 percent in 2011 to almost 43 percent at the end of Q2 2015. Alabama has been slow to recover from the recession, but at PW&Co, we have finally begun to see an uptick in businesses looking to grow – raising growth capital or expanding through acquisition – a positive sign for the Alabama economy.
Click here to download the full report with a more in-depth look at the statistics and recent valuation trends. The chart below shows a current snapshot of middle-market transaction multiples over the last two years.
Source: Factset
Our Valuation Newsletter explores recent valuation trends in the public and private markets, directed to small and middle market business owners and the professionals and financial institutions that serve them. The review is designed to provide realistic guidance on the question “What’s it Worth?,” keeping in mind that proper preparation for real world transactions requires analysis of specific situations based on up to date data. This is the third edition of the Porter, White & Company Valuation Review, which is published quarterly.
