Midwest M&A: Strong Valuations, More Buyers Than Sellers
Strong environment for local companies to continue over near-term
February 19, 2015 – The Bridgepoint Midwest M&A Index rose substantially to 103.3 to end the fourth quarter of 2014. On a year-over-year basis, the index decreased 13.0% from Q4-13. The strength of the index in the latest quarter indicates that Midwest M&A activity remains at healthy levels.
Midwest M&A activity continues to reflect a strong deal-making environment. Valuations on a TEV/EBITDA basis are at all-time highs in many sectors and elevated across the board, fueled by high demand but low supply for quality deals, record buyer cash stockpiles and easy buyer access to debt with historically aggressive terms. M&A professionals expect strong valuations and increasing corporate confidence to continue to drive deal volumes into 2015.
“Our private equity and lender contacts are consistently reporting large quantities of capital chasing too few deals. It’s a great time to be a company in the Midwest and a tougher time to be a private equity firm or institutional lender,” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking. “We expect this window to remain open over the near-term, while longer-term headwinds could impact valuations and capital availability. The time is now for Midwest companies.”
The current environment represents a good time for local business owners, with access to a number of liquidity options and premium valuations, to optimize their capital structures, explore non-traditional dealmaking opportunities and evaluate strategic options. Middle market lenders are also providing attractive leverage and terms to support refinancing and recapitalization as well as acquisition and/or growth strategies.
To read the full report, visit www.bridgepointmb.com/bridgepoint-insights
Bridgepoint Merchant Banking is a lower and middle market investment banking and private equity firm headquartered in Nebraska and Iowa that serves business owners and companies over their corporate lifecycles by providing merger and acquisition and corporate finance advisory services. Bridgepoint Merchant Banking also invests capital directly into companies through its private equity and venture capital funds.
Bridgepoint Merchant Banking is a division of Bridgepoint Holdings, LLC. In order to offer securities-related Investment Banking Services discussed herein, to include M&A and institutional capital raising, the Principals of Bridgepoint are registered representatives of M&A Securities Group, Inc., an unaffiliated broker-dealer and member FINRA/SIPC.
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