Argos Mid-Market Index Dec 2011 : increase in mid market valuations driven by strategic buyers
Paris – As of December 2011, valuations of euro zone private mid market companies stood at 7.5x EBITDA, an increase of 14% compared to 2010.
Although M&A mid market activity in the 2nd half of 2011 decreased sharply (-13% in volume compared to the previous half-year), the acquisition multiples remained largely unaffected: the multiples paid by the strategic buyers grew from 6.9x in June 2011 to 7.5x EBITDA in December, thus rising again to the level of valuations of LBO transactions which have stayed practically unchanged at 7.5x EBITDA.
Regarding the strategic buyers, the prices have been driven by foreign industrial buyers, in particular North American, who have continued to show a growing appetite for mid market companies in the euro zone: they now account for more than 40% of industrial acquisitions compared to 26% two years earlier.
Concerning the LBO funds, Gilles Mougenot, Chairman of Argos Wityu France, underlines that “they increasingly focus on the most attractive companies and no longer on the volume of transactions”. The number of LBO transactions fell by 20% since the previous half-year, due both to the continuously difficult financing conditions and to the fact that a number of LBO funds are preparing to enter a new fund raising phase, and are thus less active on the acquisitions side.
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 Sodtic 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 has developed the largest database for European private company transaction multiples (EMAT), and provides research reports, market intelligence and indices on a regular basis.
The EMAT database (« Epsilon Multiple Analysis Tool™ ») includes the detailed analysis of 5,000+ M&A deals (1 to €500m value) covering all industry sectors. Accessible via a proprietary web platform, it has quickly become for its customers (funds, banks, accountants, M&A advisors, corporates) a reference source in Europe for private company acquisition multiples.
Epsilon’s team is composed of corporate finance professionals and financial analysts, Paris and London based. It has received for its EMAT database the label of Finance Innovation, the Paris-based global financial services cluster.
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 twelve-month rolling basis, it is carried out by Argos Wityu and Epsilon Research, and published every six 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)
Argos Mid-Market Index next release: May 21st
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