Argos Mid-Market Index June 2013: M&A activity at all-time low, stable valuations

Argos Mid-Market Index June 2013: M&A activity at all-time low, stable valuations

Argos Mid-Market Index June 2013: M&A activity at all-time low, stable valuations green_squares


Paris, 25th July – While M&A activity continues to decline and hit historical lows this quarter, Eurozone private company valuations showed a slight increase from 6,6 to 6,7x EBITDA.

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With an increase of 1.5% this quarter, the Argos Mid-Market Index is stable at 6.7x EBITDA.

As in the previous quarter, this increase is explained by the dominance of trade buyers whose activity enabled the slight increase in valuation multiples to continue (+3% from 6.5x to 6.7x EBITDA).

Valuations for LBO transactions remain relatively stable increasing from 6.6x to 6.7x EBITDA, with funds concentrating on companies with strong growth potential.

M&A activity recorded a record drop of 42% in volume and 45% in value terms (vs. 1st quarter), thus reaching its lowest level for 10 years.

The decline in LBO activity this quarter is even more dramatic with a drop of 63% in volume and 82% in value terms.

Finally, transactions carried out by quoted companies remain dominant (54%) during the first semester over the total number of acquisitions by trade buyers, and foreign players have maintained their activity in spite of continuing concerns over the future of the Eurozone.

Gilles Mougenot, Partner in Argos Wityu comments: “M&A activity continues to tumble in a context of a wait-and-see approach of vendors and long term economic uncertainty for investors.

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 €60m in companies with revenues of €20m to €400m.

With €675m 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 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).

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 2013

Contacts Argos Wityu : Gilles MOUGENOT, Jérémie FALZONE
Press : Céline LANOUX,  clanoux@argos.wityu.fund, Tel. +33 1 53 67 20 50
Contact Epsilon Research : Grégoire BUISSON,  gregoire.buisson@epsilon-research.com, Tel. +33 1 47 70 30 24

 

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