Average entry multiple climbs to 10.8x in Q2

The Nordic and CEE regions saw the highest average multiples in Q2 2017 at 11.8x, while all regions aside from Benelux and DACH witnessed an increase compared to the previous quarter. High Nordic multiples have been driven by three large transactions in excess of €500m and a high number of highly priced acquisitions in the technology media and telecommunications (TMT) sector. The CEE figure has to be put in context, as it was driven by a high-value healthcare transaction.

Sector-wise, real estate was the hottest market in Q2 2017, driven by KKR’s €2.95bn acquisition of Netherlands-based car parks owner Q-Park driving the overall average to 12.2x. The food and beverage sector also saw significant price inflation up to 11.9x, driven by large transactions in southern Europe, the Nordic region and the UK and Ireland. Notably, all sectors saw double-digit average multiples in Q2 2017, with only the financial services sector witnessing a decrease from 11.9x to 11.2x.

For the second consecutive quarter, the automotive sector and industrials and chemicals space represented the best value opportunities. Both averaged a 9.5x EBITDA multiple in Q1 2017, and crept up to 10x and 10.1x respectively. TMT was the only sector with assets priced below their 18-month average. Deals in the space saw average entry multiples of 10.7x, compared to 10.9x over the last six quarters.

Large-cap investors paid the highest entry multiples, with mega-deals valued at €1bn and above fetching an average 13.3x EBITDA and deals valued at €500m-1bn witnessing entry multiples of 12.4x. Investors in the €100-250m enjoyed the least frothy pricings, with an average of 10.2x.

Click here to read the full unquote" and Clearwater Multiples Heatmap Analysis overview for Q2 2017.

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