Bridgepoint Midwest M&A Index, Q1-14

MIDWEST DEAL-MAKING AND FINANCING ENVIRONMENT REMAINS ROBUST IN THE FIRST QUARTER
Positive start following a record year; acceleration expected to continue

May 15, 2014 – After consecutive increases in the third and fourth quarters of 2013, 2014 Midwest M&A activity got off to a positive start in the first quarter. The Bridgepoint Midwest M&A Index remained well above the baseline at 111.4 despite a slight decrease of 4.9% in the first quarter of 2014. The index remained in line with previous quarters and shows signs that momentum is building.

Buyers and sellers picked up their deal-making pace in the latter half of 2013 which has continued into 2014. Valuations remain at above average levels fueled by high demand, low supply for quality deals, record buyer cash stockpiles and easy access to debt with historically aggressive terms.

The first quarter recorded the third highest median deal size since 2009. Midwest median deal size has continued to increase over the past 4 years. Corporates and sponsors are refocusing their attention on larger targets with local strong capital markets support to supplement organic growth.

“Buyers and sellers continue to pursue meaningful opportunities and Bridgepoint expects closing announcements to increase over the remainder of the year.” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking. “The appetite for acquisitions remains strong amid record cash stockpiles and the capital markets remain anxious to aggressively put capital to work. The current environment translates into new opportunities and options for many Midwest companies.”

The current environment represents an attractive opportunity for Midwest business owners to explore liquidity options and take advantage of premium valuations. Middle market lenders and equity sources are also providing attractive leverage to support refinancings as well as acquisition and/or growth strategies.

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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.