Q2 Deal Multiples Update

August 21, 2013 10:45 by Clayton Reeves in Capital Markets, Economy, M&A  //  Tags: , , , , ,   //   Comments (0)

The market was widely unchanged from Q1 to Q2 2013.  Multiples remained comparable to the quarter prior, and there remained a significant premium in play for larger companies.

- The median EBITDA multiple for all deals was 6.07x.
- The median revenue multiple for all deals was 1.06x.
- The median debt percentage for all deals was 57%.
- The average time to close a deal was 15 weeks.

One of the most interesting factors was the push away from only companies with topline growth; in the most recent quarter,  33% of the acquired companies saw flat or shrinking revenue in the year prior to acquisition, while respondents anticipate that 90% of the companies acquired in 2Q will see heightened revenue in the year ahead.  Last quarter, very few companies would invest in a company without topline growth.  It looks like the competition between buyers may be forcing the hand of some participants to go outside their normal constraints.

Click here to read the report from Pitchbook.

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