By Shelby Schagrin, Vice President and Managing Director, Investment Banking
While large transactions often get a great deal of press, middle-market mergers and acquisitions comprise the majority of transaction volume and continue to grow. Transaction multiples continue to increase due to the competitive environment of buyers along with the lack of quality acquisition targets, according to Thomson Reuters. Median Enterprise Value/EBITDA multiples for U.S. middle market transactions increased to 7.2x in Q3 2014 from 6.2x in Q2 2014, according to Thomson Reuters.
We expect middle market merger and acquisition values and volume of transactions to remain strong as strategic buyers have large cash reserves; financial buyers continue to be extremely active in the middle market and international buyers focus increasingly on middle market companies.
What does all this mean? It appears that we are experiencing a strong sellers’ market. If you are a business owner and you are thinking of selling your company as an exit strategy, you might consider consulting with an investment banker who specializes in middle market M&A to understand the process.
This material has been prepared for informational purposes only and should not be considered a solicitation or a recommendation to buy or sell a business or security. This material has been prepared as an informational tool only and is not comprehensive has been prepared for clients of Benjamin F. Edwards & Co. and other interested parties. It does not take into account the investment objectives, risk tolerance or investment needs of recipients or readers. Although the information in this report has been obtained from sources that the firm believes to be reliable, we do not guarantee its accuracy, and any such information may be incomplete or condensed.