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CMF Surveys Middle-Market Private Equity Funds’ Year-over-Year Trends

By October 10, 2014Press Releases

PHILADELPHIA (October 10, 2014) — CMF Associates, a leading provider of financial, operational, and human capital solutions to private equity, middle-market, and small cap public companies, today released the results of surveys completed by private equity executives at the M&A East conference in Philadelphia, October 7-8, 2014, compared with the results from the same surveys conducted at M&A East in 2013, 2012, and 2011.

Purchase multiples have increased significantly over the past four years, with a full 20% of respondents indicating a purchase multiple in excess of 9X (significantly above last year’s 4%). Qualitatively, from what we heard during our 40+ meetings at the conference, many private equity groups are venturing into this range in order to compete with strategic buyers.

Meanwhile, the average time to close a deal has remained steady in the 4-6 month range, although we are still seeing funds take 10+ months to close deals; many anecdotes we heard spoke of 30-day closes or 12-month processes, making their average in the 4-6 month range.

Finally, there is optimism at the portfolio level with sales growth remaining consistent with prior years and a majority expecting between 5% and 15% growth; 2014 showed a significant subset of funds expecting 10-15% revenue growth out of their portfolio.

See full press release and graphs here.

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