How are private equity dealmakers adapting to the current environment, marked as it is by difficulty in sourcing quality targets and macroeconomic uncertainties?
PitchBook's 2016 Global PE Deal Multiples Report: I examines data collected in quarterly surveys as well as investment metrics sourced from the PitchBook Platform to provide answers. Sponsored by Toppan Vite, and co-sponsored by Valuation Research Corporation and NewStar Financial, the report delves into deal multiples and additional metrics to assess the strategies employed by middle-market PE firms today as they navigate a murky investment landscape marked by decreasing supplies of quality targets and still-lofty mounds of dry powder.
"Over the last couple of years, much of PE was about getting your prized portfolio companies to market, securing generous exit cash flows for your limited partners and bolstering IRRs. Today, much of the incentive has shifted towards acquiring stability and positioning for the unknown." - Nizar Tarhuni, Senior Analyst
Report Highlights Include:
Median EBITDA multiples for central-middle-market enterprises drop
In 2015, no more than 14% of completed deals in a given quarter had experienced declining revenues on trailing 12 months' basis—in 1Q 2016, that figure jumped to 20%
27% of respondents indicate reception of Confidential Information Memoranda was up from the prior quarter
The topic of transaction fees will become more pronounced