Argos Index June 2012 : the majority of industrial buyers of European SMEs are foreign, valuations again lower
Paris, 24th July 2012 – While non listed mid-market valuations in the Euro zone fell once again, to 7x EBITDA, the foreign industrials are more active than European buyers
The valuations of non-listed companies in the Euro zone fell for the 2nd consecutive quarter: by 2,8% in June, and 9,1% since the beginning of the year 2012. This drop results mainly from the fall in value of LBO transactions: from 7,4x to 6,6x EBITDA, whereas the prices paid by industrial buyers for their acquisitions rose slightly, from 7,2x to 7,5x EBITDA.
In the same way, the volume of completed transactions fell once again (-16% compared to the preceding quarter) slumping to its 2009 level. It is noteworthy that medium sized enterprises in the Euro zone purchased by industrial buyers are now acquired, in majority, by foreign buyers who are thus profiting from the difficulties experienced by buyers situated in the Euro zone.
In its turn, LBO mid-market activity confirmed the collapse shown in the 1st quarter, with a drop of 40% both in volume and in value. « This can be explained by the persistent weak visibility concerning the economic activity of the enterprises, which increases the sellers’ « wait-and-see » approach and encourages prudence in buyers » comments Gilles Mougenot, President of Argos Wityu France.
About Argos Wityu
Argos Wityu is an independent European private equity group with offices in Paris, Milan and Geneva. Since its creation in 1989, Argos Wityu has carried out more than 50 transactions focusing on management buy-outs and buy-ins in small and medium companies. Argos Wityu typically takes majority stakes ranging from €5m to €50m in companies with revenues of €20m to €400m.
With €700m under management, the firm has developed a track record of unusual, complex and off market transactions where the firm’s combination of local presence and international experience is able
to add value to the small and medium-sized businesses it invests in.
About Epsilon Research
Epsilon Research is an independent research and financial analysis bureau specialising 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).
About the Argos Mid-Market Index
The Argos Mid-Market Index measures the evolution of European private mid-market valuations. Based on the median of historical EV/EBITDA multiples, on a six-month rolling basis, it is carried out by Argos Wityu and Epsilon Research, and published every three months. The transaction sample fulfils the following criteria:
- mid-market companies (equity value between €15m and €150m)
- target based in a euro zone country
- acquisition of a majority stake
- specific industries excluded (financial services, real estate, high-tech)
Next Argos Mid-Market Index: November 2012
Contacts Argos Wityu : Gilles MOUGENOT, Karel KROUPA
Press : Céline LANOUX, firstname.lastname@example.org, Tel. +33 1 53 67 20 50
Contact Epsilon Research : Grégoire BUISSON, email@example.com, Tel. +33 1 47 70 30 24