On October 13th and 14th at the Association for Corporate Growth’s M&A East Conference, CMF met with more than 50 private equity funds to discuss the world of mergers and acquisitions, and the trends they are seeing in the market. Consistent with years in the past, CMF conducted a survey on purchase multiples, on time to close a deal, and on aggregate portfolio sales growth. Below are the results from our Fall 2015 survey, compared to prior results from surveys conducted at the same conference in 2014, 2013, and 2012.
The results of our survey were on par with what most of the industry is seeing right now:
- EBITDA multiples remain high, with over 32% of respondents seeing 9X multiples (or higher), compared to only 19% seeing 9X multiples in 2014; this is relatively consistent with the 4Q 2015 US PE Breakdown Pitchbook report, which reported that median valuation multiples for YTD 2015 were 8.3X.
- On par with past years, many PE folks we spoke with said they are driven into the higher EBITDA multiple range in order to compete with strategic buyers.
- Average time to close a deal, from first meeting with management, is about four to six months, which is the same as in Q4 last year.
- Moreover, funds we spoke with noted situations where deal processes take as little as 30 days, and other situations where deal processes take 12 months or more.
- Average sales growth at the portfolio is expected to be 5-10% over the next year; on par with 2014, however, fewer respondents indicated sales growth averaging over 10% this year compared with 2014.
Click here to read CMF’s full survey results and view the data.
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