Private Equity Deals Reward Larger Companies

by Dennis Stuchell 10. September 2012 13:47
  Private equity investors in the middle market are paying significantly higher multiples to acquire larger firms, while the premium investors place on above-average financial performance is diminishing, GF Data reports. “The tired cliche is proving out this year. Size does indeed matter. What we are seeing is that financial buyers will assign record value to a $100 million property in relation to a comparable $25 million business, that the scarcity of quality deals has eroded the differential between the ‘A’ and ‘B’ businesses at the lower-end of the middle market, and that a business benefitting from both size and quality performance still will be rewarded for both in the marketplace,” said Andrew T. Greenberg, GF Data’s CEO and co-founder. GF Data maintains a middle market database on private equity transactions and valuation multiples (like EBITDA multiples).  This data can be very useful to business owners and appraisers as a sanity check on their estimates of value.  See GF Data website at www.gfdataresources.com.  
Categories: Advisory