Mid-market valuations at highest level ever in latest Argos index

Greg Gille
@unquotenews
16 November 2017

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Entry multiples for mid-market assets rose further in Q3 to reach a record median of 9.5x EBITDA, according to the latest Argos Index.

The index, published by Argos Soditic in association with Epsilon Research, tracks median entry multiples for assets valued between €15-500m in Europe. It reached 9.5x EBITDA in the six months to Q3, up from 9x in the previous quarter. It is the highest level ever recorded in the index, exceeding the 9.1x seen in 2006 and 2016.

The median multiple was mainly dragged upwards by a sharp increase in the prices paid by strategic buyers to 10.6x EBITDA, against 9.3x in Q2. By comparison, the multiples paid by private equity investors stood at a more modest 9x in Q3.

This increase in valuations is in line with the Multiples Heatmap, published by unquote" in association with Clearwater International. The latest Heatmap showed an average entry multiple of 10.8x across Europe in Q2 – it also encompasses valuations in excess of €500m (where entry multiples tend to be significantly in excess of the average) as well as pricier sectors such as financial services excluded from the Argos Index.