M&A Quarterly - June 2018

June 18, 2018|Ann Hanna, Corey Vanderpoel

Market Summary

  • Q1 2018 averaged 6.9x TEV/EBITDA, a notable decline from 8.0x in Q4 2017.
  • The two industries showing the highest EBITDA multiples during Q1 2018 were retail and technology at 10.6x and 9.7x, respectively. EBITDA multiples for all manufacturing companies averaged 7.1x, which is 1.0x above historical averages.
  • The spread on size premiums for larger-sized deals between $50 million and $250 million compared to deals between $10 million to $50 million was 3.4x during Q1 2018, which is significantly above the average historical level of 2.1x.
  • Buyers continued to reward businesses having above-average financials (TTM revenue growth and EBITDA margins above 10%, or one above 12% and the other 8%) during Q1 2018. These businesses averaged 7.4x versus 6.1x for all others, which is a premium of 21%.
  • Senior debt/EBITDA multiples across all industries remained at the elevated levels established earlier in 2017 and in Q1 2018 were 3.4x.
  • Average equity contributions fell to 41.9% during Q1 2018, a decline from 44.2% in 2017, due to pressure on private equity target returns.

What’s New at Taureau Group

  • March – Completed valuation assessment for a company in the fabricated metal industry through partnership with WMEP
  • March – Presented to attendees at Manufacturing Matters! 2018; Sponsored and presented to attendees at the BizTimes M&A Forum
  • April – Completed valuation assessment for a company in the plastics manufacturing industry through partnership with WMEP
  • April – Advised OwnersEdge, Inc., on acquisition of Qcomp Technologies, Inc.
  • May – Engaged to advise a printing and packaging company on potential sale
  • May – Engaged by an industrial coating company to advise on potential sale
  • May – Continue to seek add-on acquisition opportunities for buy-side clients in the plastics manufacturing and niche technology industries
  • May – Completed the sale of Bradshaw Medical Inc. to In’Tech Medical S.A.S., a portfolio company of Eurazeo PME
  • May – Engaged by buy-side client to consider acquisition of chemical engineering company
  • May – Completed valuation assessment for a company in the agriculture manufacturing industry through partnership with WMEP
Save the date for our co-sponsored annual M&A Forum, Fact or Fiction, taking the mystery out of M&A, to be held on October 16 at the Best Western Premier Bridgewood Resort Hotel & Conference Center in Neenah. 

Market Statistics

Total Enterprise Value (TEV)/EBITDA*

TEV '03-13 '14 '15 '16 '17 YTD'18 Total
10-25 5.5 5.5 5.8 5.8 6.4 5.7 5.6
25-50 6.1 6.4 6.6 6.4 6.6 6.7 6.3
50-100 6.7 7.5 7.8 7.3 8.3 9.2 7.0
100-250 7.2 7.5 9.0 8.9 9.2 8.6 7.9
Total 6.1 6.4 6.7 6.8 7.4 6.9 6.3

TEV/EBITDA—By Industry Category*

Industry '03-13 '14 '15 '16 '17 YTD'18 Total
Manufacturing 5.9 6.1 6.6 6.1 6.9 7.1 6.1
Business services 6.1 6.1 6.3 7.3 7.5 6.5 6.3
Health care services 6.8 7.2 7.8 7.6 8.1 6.6 7.1
Retail 6.4 6.0 5.5 7.1 7.6 10.6 6.6
Distribution 6.0 7.1 6.7 7.5 7.6 7.5 6.4
Media & telecom 7.2 NA 6.4 6.7 8.2 5.0 7.1
Technology 6.6 7.7 8.0 7.4 10.2 9.7 7.6
Other 5.8 6.4 5.6 7.0 6.6 5.7 6.0

Senior Debt/EBITDA—Splits by Period*

TEV Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118
10-25 2.7 2.7 3.1 3.3 2.7 4.5 4.0 2.9
25-50 3.1 2.9 2.3 2.8 3.2 2.7 2.9 3.4
50-100 4.0 2.8 3.0 2.9 4.6 3.0 3.9 4.2
100-250 3.5 4.4 3.5 3.7 3.8 4.2 3.5 3.7
Total 3.3 3.2 2.9 3.1 3.6 3.7 3.5 3.4

*Source: GF Data®. Information included from GF Data may not be used or re-published without permission from GF Data or Taureau Group.

View the PDF version of M&A Quarterly



Contact Us