Valuations are getting expensive for PE firms, according to PitchBook's 3Q 2014 U.S. PE Breakdown report. Through the first half of 2014, the median purchase price multiple hit 11.5x, the highest level in several years. Valuations are being pushed higher thanks to large amounts of leverage being used for deals; the median debt-to-EBITDA multiple for 2014 deals has jumped to 8.2x, a big jump from 6.9x in 2013.
Despite the high valuations, PE investors are still putting their money to work. 2Q 2014 marked the fifth consecutive quarter recording more than $100 billion of aggregate investments. Deal flow receded a bit in the second quarter with 515 total transactions, the fewest in a quarter since 3Q 2010.