Latest release - June 2011 : mid market valuations return to their pre-crisis level
The valuations of medium sized unlisted euro zone enterprises rose to 7,2x EBITDA at the end of June 2011, bringing it back to its historical average since the creation of the Argos Mid-Market Index.
Paris, 28th September 2011
The increase in the Index is driven by the increase in acquisition multiples in LBO transactions which reached 7,6x EBITDA, i.e. +13,5% compared to December 2010. The LBO funds have thus paid 10% more for their acquisitions than have strategic buyers, for which acquisition multiples only rose marginally to 6,9x EBITDA.
Not only has the plentiful available liquidity which the funds still have encouraged for the acquisition of attractive enterprises, but as Gilles Mougenot, Chairman of Argos Soditic France underlined: «it also seems to have led them to bet, more strongly that did industrial buyers, on a return to growth of the enterprises », and so to reason often in multiples of expected future results.
On the other hand, Mid market M&A activity in the euro zone has, surprisingly, only shown slight evolution since the previous half year and for 18 months, has remained at its 2003/2004 level. The factors which seemed to encourage a revival of activity, in particular the low level of debt of industrial enterprises, only had a limited influence in the face of macroeconomic uncertainties and market volatility which led companies to delay their acquisition projects.
Download the complete Index : June 2011 (PDF)
Previous releases (PDF)
About the Argos Mid-Market Index
The Argos Mid-Market Index measures the evolution of European private mid-market company prices. Carried out by Epsilon Research for Argos Soditic and published every six months, it is based the following criteria:
- median EV/EBITDA multiples on a twelve-month rolling basis (year N-1)
- mid-market companies (Equity value between €15m and €150m)
- target based in a Euro zone country
- acquisition of a majority stake
- certain activities excluded (financial services, real estate, high-tech)
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