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Two weeks ago, we attended the ACG InterGrowth conference in Las Vegas and the “buzz” of the week revolved around inflated deal prices and lack of quality deal flow – the former a more recent issue and the latter an ongoing issue for most.

However, the scene was much more upbeat than the last time the conference was held in Vegas, which was in 2009. Doom and gloom were the “buzz words” circling the conference five years ago, when sellers were happy with 4-5X EBITDA multiples and the tone was much more serious (check out our first-hand experience from 2009 here).

This year’s anecdotes were confirmed in our annual survey of middle-market private equity groups at the conference. Highlights of our survey results include:

  • M&A EBITDA multiples are significantly shifting towards the 8-9X range, versus a peak in the 6X range in previous years
  • Average time required to close a deal remains steady in the 4-6 month range, but with more participants experiencing 6-8 month timeframes than in 2012 and 2013 (likely due to extended diligence)
  • Sales growth expectations within the portfolio as a whole are expected to increase to 5-15%, compared to expectations of 0-10% in 2013

Click here to see the full survey results.

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