GF: Private equity deal values back to earth
Sale prices for mid-sized businesses dropped to 6 times earnings (before income tax, depreciation and amortization) during the second half of last year, from 6.5 times during the first six months, Philadelphia deal professionals Andrew Gree
Sale prices for mid-sized businesses dropped to 6 times earnings (before income tax, depreciation and amortization) during the second half of last year, from 6.5 times during the first six months, Philadelphia deal professionals Andrew Greenberg (managing partner at Fairmount Partners) and Graeme Frazier (president, Private Capital Research LLC) said in a report today.
Besides their day jobs, Frazier and Greenberg crunch data through their side business, GF Data Resources, which tracks private equity-backed mergers and acquisitions valued at $10 to $250 million.
"Larger transactions have taken much more of a hit" since "the sub-prime cirsis emerged in early July and triggered econmic uncertainty and tighter credit," Greenberg said in a statement. "Lenders were financing quality transactions, but beginning to extract better pricing after years of thin margins." Money's still available for "quality deals," with media and publishing getting some of the best prices; business services are among the lowest.
UPDATE 3/31: M&A paydays down as deals dry up. Bloomberg has the story at http://www.bloomberg.com/apps/news?pid=20601087&sid=aGDIGpFKILzM&refer=home.