Southeastern M&A Private Equity Forum
State of the market
Volume of activity
- Strong deal momentum in 2016 and SEMA panelists remain cautiously optimistic about aggressive deal climate through 2017
- Private equity firms have available capital of over $500 billion ready to deploy
- Median observed multiple paid in M&A transactions through 2016 was 12.7x EBITDA and that was down from the peak median multiple of 13.1x observed in 2015 but higher than long-term median multiple of 10x. (Note that the robust technology segment skews the median multiple to higher levels.)
- Strong sellers’ market | hypercompetitive buyers’ market.
Deal Volume Drivers
- Lending - Favorable access to debt markets with relatively low interest rates and increased supply of debt through non-bank lenders
- Healthcare and Technology remain the most active M&A markets
- % of deals done by strategic investors is on the rise; in 2011 50% of deals were done by strategic investors and in 2016 it is 70% of deals
PE Firm Competition
Dollars – PE firms are facing a crowded market for Limited Partner funds
- PE firms have raised over $369 billion through first half of 2016
- 2800+ PE firms are currently trying to raise money and 50% of those firms have been in the market over a year without closing a first investor.
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.