Analysis
The latest unquote” online poll reveals that the pricing mismatch that is said to have hampered dealflow throughout last year is still noticeable, although the gap has narrowed. Mareen Goebel reports
While as many as 85% or respondents to the same poll last year believed that sellers were still demanding unreasonable asking prices in the light of the macro-economic outlook, the latest result reveals that now only around six in ten see valuations as still being too high.
Although for a buyer an entry price can certainly never be low enough, the resilience seen in pricing indicates that vendors are still of the opinion that current prices are not a fair reflection of the true value of their assets and therefore are willing to hold on to their assets for as long as possible.

At the same time some GPs are starting to feel the pressure to invest having been either preoccupied with their portfolio companies over the past 18 months or decided to stay out of the market altogether. Add to this the strategic investors that have come back to the market looking for acquisitions, and it is easy to see why valuations have remained unexpectedly high, regardless of the macroeconomic outlook. "Judging by the sales processes we've been taking part in, the multiples are coming closer together, but mostly because the extreme offers are gone. The average though still continues to be fairly high," comments Nikolai Mackscheidt of German-based small-caps investor BPE.
What is more, recent deals have shown that debt markets are certainly thawing, which should result in more GPs coming back to the market and therefore increasing competition for assets as the year goes on. Current valuations might prove to be the bottom after all.
Your comment will be moderated before publication.
search unquote.com
Industry news
Corporate finance advisers Dow Schofield Watts have opened a Leeds office, to be headed up by Roger Esler.
Care home operator Four Seasons is reportedly looking to raise up to £230m equity as it struggles to refinance debt.
Asset manager Adveq has announced it will increase its number of staff by 10% in 2012.
French private equity firm Abenex Capital has appointed Nicolas Bertrand as investment manager.
More from unquote
Latest Analysis
Event
Updating your subscription status
Regions - click map below to view

Digital Editions
Reports & statistics
Private Equity jobs
Visitor Comments