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Welcome to our first M&A Insights of 2018.  Our goal here at CKS Advisors is to help you and your clients stay up-to-date on the current Merger and Acquisitions climate.  Stay tuned for more brief updates on M&A activity in the future.

Reports show Global PE Deal Multiples remain strong through the end of 2017.  Here are the latest research numbers according to Pitchbook®:  Click here to view report.  

The report details PE deal statistics for the 3rd and 4th Quarter of 2018 with data sourced from hundreds of surveyed PE firms by PitchBook.

  • In 2017, the main killer of PE deals are broken out in the following:
    • 46%- Adverse information came to light during diligence
    • 28%- More competitive offers from other groups or funds
    • 15%- Companies could not meet financing contingencies
    • 8%- Change in market Fundamentals
    • 3%- Other
  • The 4th quarter median Valuation/EBITDA multiple for companies between $25m and $100m was 6.3x, slightly lower than 3rd quarter averages
    • The median multiple for companies smaller than $25m is 5.9x

Our two takeaways:

  • The lower middle market is the only size group to see EV/EBITDA multiple growth in the 4th.  The other groups saw a drop off from the Q3 multiples. We believe this to be from political forces and firms who started their push to deploy capital closing more deals in the 3rd  quarter
  • Diligence matters- It is important to have a plan for your business. Before putting your company on the market, make sure your company is in good order

If you or a client would like to learn more about the M&A market or is ready to explore opportunities we would be glad to meet with you. You can contact me at 480-351-8533 or myoung@cksadvisors.com.