Paris 23rd July 2014 – The Argos Mid-Market Index posted a sharp increase in the 2nd quarter to 8.6x historical EBITDA, while M&A activity stagnated at low levels.
Valuation multiples of Eurozone private medium-sized businesses increased by more than 10% this quarter from 7.8x to 8.6x historical EBITDA.
This growth was supported by both trade buyers (+7% compared with the previous quarter) and buyout funds, which increased 14% from 7.3x to 8.3x EBITDA.
The large share of listed buyers (60%) approached its record high level reached in 2007, benefiting particularly from the rise in European equity markets.
However, this growth occurred in an M&A activity environment in line with the first quarter: a low transaction level in volume and value. Only acquisitions by industrial groups on the mid-market market saw a slight rebound in contrast with the sharp increase in large-cap deals.
“Even in an environment of investor confidence, M&A mid-market activity volume remains low, due in particular to the increasing scarcity of quality assets on the market”, according to Gilles Mougenot, President of Argos Wityu Partners.
Argos Wityu is an independent European private equity group with offices in Paris, Milan, Brussels and Geneva. Since its creation in 1989, Argos Wityu has carried out more than 60 transactions focusing on management buy-outs and buy-ins in small and medium companies. Argos Wityu typically takes majority stakes ranging from €10m to €60m in companies with revenues of €20m to €400m.
to add value to the small and medium-sized businesses it invests in.
Epsilon Research is an independent research and financial analysis bureau specializing in the M&A/ private equity markets. It provides research, deal analysis and market intelligence on private company M&A and LBO transactions.
Its key product, EMAT («Epsilon Multiple Analysis Tool™ »), is the largest database for European private company transaction multiples, with detailed analysis of 5,000+ M&A deals (1 to 500 m€ value) covering all industry sectors. It has quickly become a reference source for its customers (investment funds, banks, accountants, M&A advisors).