Great current info from my good friend Bill Cavanagh of Gunflint Capital in the Twin Cities:
GF Data’s 196 active private equity data contributors completed 53 deals in the $10 million to $250 million Total Enterprise Value (TEV) range in the first quarter of 2015, at an average valuation of 6.8x Trailing Twelve Months (TTM) Adjusted EBITDA. This valuation mark continues a steady upward march in aggregate pricing levels from 6.2x in the first quarter of 2014.
“This is a level of momentum in completed-deal activity we’ve not seen in eight years,” according to GFData’s CEO Andy Greenberg.
GF Data continues to see the rise in equity values as reflecting the even more pronounced surge in debt availability and utilization. According to B. Graeme Frazier, IV, GF Data’s Co-Founder and Principal, “Average equity share has dropped steadily over the past two years from 49.1% in 2013 to about 44% in the first quarter of 2015. Our report shows wide variations in average equity contribution for various size cuts as a result of continued valuation discipline on smaller deals and unprecedented debt availability on larger ones.”
“M&A valuations appear destined to hold firm or even possibly still rise as a result of this persistent low interest rate environment, cooperative capital markets and a high degree of buyer confidence,” said Joe Culley, Co-Head of Investment Banking at Janney Montgomery Scott. “Our sell-side clients continue to be pleased with not only what valuations they are receiving but also the favorable contract terms and conditions they are successfully negotiating.”