Articles

Valuations Soared in 2015, Making it Tough for PE Firms to Compete with Strategic Buyers

Jan 22, 2016

 

Prices paid for lower middle-market targets averaged 9.1 times Ebitda, up from 7.8 in 2014, says GF Data’s Graeme Frazier.

Soaring valuations in today’s frothy M&A environment have made it difficult for the average private equity firm to win deals. Even when a private equity firm is able to buy a company, the margin to create value is thin, due to the high price paid to acquire the company in the first place. According to S&P Capital IQ’s LCD unit, U.S. buyout firms paid an average of 10.3 times Ebitda for their purchases in 2015. That’s surpasses the 9.7 times Ebtida seen in 2007.

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Calling the Crest, Continued

Nov 5, 2015

 

Midsize companies commanded higher valuations in the third quarter, though the number of deals was down, according to GF Data Resources, a research firm that tracks the middle market.

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Calling the Crest

Sep 25, 2015

 

A question framed by GF Data’s second quarter report, accentuated by the recent tumult in the international and domestic equity markets, and on the minds of deal professionals

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Are Valuations Commoditizing?

Feb 5, 2015

 

A question raised with increasing frequency this past year is: Are valuations of middle market businesses becoming commoditized? That is, if you have a business of a given size and industry, is it more likely now than at some point in the past to be valued within a narrower and more easily predicted range, often expressed as multiples of cash flow?

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Confluence of Debt

Oct 9, 2014

 

The analysis surrounding GF Data’s quarterly reports usually is based on observing some trend or anomaly in the data and then drawing from practical deal-making experience to explain it.

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Where Have All The Sellers Gone?

Mar 20, 2014

 

When GF Data published its various year-end reports last month, the analysis seemed to confirm what many business buyers and deal professionals had already drawn from their own experience.

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