Mid-market index draws close to all-time 2006 high – Argos Soditic

Katharina Semke
20 November 2015

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The median entry multiple paid by private equity houses in mid-market deals has increased, while the spending of trade players fell, according to the latest Argos Soditic Mid-Market Index.

The median entry multiple paid by buyout houses for mid-market deals (here defined as transactions worth between €15-500m) reached 9.0x EBITDA, while those paid by trade players fell to 8.0x.

This brings the average EBITDA to 8.5x in the third quarter of 2015, against 7.8x in Q3 last year.

The multiples have picked up almost constantly in the last 12 months, with Q4 2014 recording 8.1x and Q1 2015 reaching 8.4x. A slight fall to 8.3x was recorded in Q2.

In contrast to the rising multiples, the eurozone mid-market M&A activity fell by 10% in volume and 20% in value in Q3 2015. Compared to 2014, volume fell 6% and value 9%, despite the vigour of foreign buyers from the US and Asia.

The report stated that the persistent imbalance between supply and demand explains the rise in multiples, also pointing out the ongoing fierce competition between GPs and strategic buyers.