Argos Mid-Market Index March 2013 – A slight increase in valuations and a new slump in M&A activity

Argos Mid-Market Index March 2013 – A slight increase in valuations and a new slump in M&A activity

Argos Mid-Market Index March 2013 – A slight increase in valuations and a new slump in M&A activity green_squares


Paris, 14th may 2013 – The Argos Mid-Market Index rose in the 1st quarter of 21013, to 6.6x EBITDA i.e. an increase of 5% compared to the last quarter of 2012.

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This slight recovery can be attributed principally to the increase in the prices paid by industrial buyers (from 6.3x to 6.5x EBITDA) and in particular the listed buyers, encouraged by the strong rise in the Stock markets since January 2012.

Although they have fallen from 7.1x to 6.6x EBITDA (returning to their level in the 2nd and 3rd quarters of 2012) the prices paid by the LBO funds remain almost identical to those paid by the industrials, with the funds concentrating on the most attractive companies.

In spite of a rise in the previous quarter, M&A activity has fallen sharply this quarter (13% in

volume and 36% in value) returning to its level in the 2nd and 3rd quarters of 2012 in an economic context which is durably depressed in the Euro zone.

LBO activity also fell, by 12% in volume, this quarter. Only foreign buyers maintained their level of activity, as they continued to capitalize on the withdrawal of Euro zone industrial buyers. Their share in Mid-Market transactions stood at 37% this quarter.

« The continuing weak activity in the M&A market can be attributed notably to the persistence of the macro-economic uncertainties in the Euro zone and to the increasing likelihood of a recession » comments Gilles Mougenot, President of Argos Wityu Partners.

 

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 €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: July 2013

Contacts Argos Wityu : Gilles MOUGENOT, Karel KROUPA, 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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