Bridgepoint Midwest M&A Index, Q2-13

Median valuations continued to increase to new high

July 9, 2013 – The number of Midwest companies that participated in a merger or acquisition over the past six months decelerated in the second quarter of 2013. After increasing to a record level in 2012, the index decreased 22.8% from 114.6 in the first quarter to 91.9 in the second quarter. On a year-over-year basis, the index decreased 27.6% from the second quarter of 2012.

After rushing to complete deals at the end of 2012 and recording an all-time high index level in the fourth quarter, corporates and sponsors continued to take a breather in the latest quarter. reported a similar decline in the broader U.S. deal environment with a 24.3% decline of private equity deals in the second quarter of 2013.

While Midwest deal volume in the first half of the year has been sluggish, deal fundamentals were very encouraging. Bridgepoint reported that median Midwest M&A valuations continued to grow to a new high in the second quarter.

“Despite the slowdown reported in the index, we continue to see very strong deal-making activity in the region” said Adam Claypool, Managing Principal of Bridgepoint Merchant Banking. “We are expecting the decline in deal volume to reverse in the coming quarters with companies looking to take advantage of premium valuations.”

The current setting represents an attractive opportunity for Midwest business owners to explore liquidity options and to take advantage of a strong capital market environment and premium valuations. Middle market lenders are also providing attractive leverage to support 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 clients 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.