Evolution of Euro Zone Mid-Market Private Company Prices – Quarterly Index carried out by Epsilon Research
The Argos Mid-Market Index has seen a big increase in the 3rd quarter (+5.6%) to 9.5x EBITDA, and reaches record levels – beating the peaks registered in 2006 and 2016. This quarter, the increase is stronger in the lower mid-market (transactions between €15m and €150m), where multiples grew by 5.6% and M&A increased by 13% in volume and 30% in value. At the same time, prices in the upper mid-market fell by 3% with activity falling by 5% in volume.
This record Index is sustained by the large jump in multiples paid by strategic buyers to 10.6x EBITDA. This is driven by the increase in stock markets in the 3rd quarter of 2017, and is very comparable to the evolution of quoted company multiples (as calculated by our partner Infront Analytics).
Prices paid by industrials are at their highest level since 2006: 18% above prices paid by private equity funds. The economic and financial environment remains exceptionally favourable for the merger and acquisition market: controlled inflation, low interest rates, record levels of cash to invest in large quoted companies.