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M&A Insights – Mark Young, Managing Partner, CKS Advisors

Welcome to the March 2020 edition of M&A Insights. Our goal at CKS Advisors is to help you stay up-to-date on the Mergers and Acquisitions climate.

With 2019 M&A Industry numbers now available, we would like to share updates on several of the key measurements, as well as our thoughts on what they seem to be telling us.

 

Elevated Sale Prices Continue

  • GF Data reports overall EBITDA multiples for deals valued between $10M-$250M remained steady YOY with sellers getting an average multiple of 7.2x, matching 2018’s value.
  • Of particular note, for Middle Market Companies (those valued between $10M – $50M, and our focus), valuation multiples remain strong, actually growing slightly in 2019.

 

Record Levels of Capital Available

  • According to Bloomberg, Private Equity firms are sitting with $1.5T of dry powder, compared to $1.3T at YE 2018 which was also a record, to use for their acquisitions.

 

Sustained Deal Volume  

  • According to Pitchbook’s 2019 Annual North American M&A Report, there were 11,304 M&A transactions, slowing from 2018 levels, but remaining at the elevated levels seen during the past 5 years.

 

Our Overall Takeaways:

  • With record capital raised, buyers should remain active, helping 2020 shape-up to be a strong year as they deploy their capital.
  • Thus, with buyers prevalent and pricing remaining elevated, sellers should continue to have attractive opportunities to successfully transition their business in 2020.

 

If you would like to learn more about the M&A market or are ready to take the next step to explore your options, we would be glad to meet. Please contact me at 480-351-8533 or myoung@cksadvisors.com.

 

 

This Post is for informational purposes only and does not constitute an offer, invitation or recommendation to buy, sell, subscribe for or issue any securities. While the information provided herein is believed to be accurate and reliable, CKS Advisors, LLC and Ashland Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person. Certain Principals of CKS ADVISORS, LLC are registered representatives of Ashland Securities, LLC Member FINRA, SIPC. CKS ADVISORS, LLC and Ashland Securities, LLC are separate and unaffiliated entities.  Securities and Investment Banking Services are offered through Ashland Securities, LLC.