Bridgepoint Midwest M&A Index, Q2-14

ROBUST FINANCING ENVIRONMENT AND STRONG DEAL-MAKING ACTIVITY CONTINUE IN THE SECOND QUARTER FOR MIDWEST COMPANIES
Corporations deploying record stockpiles; greater acceleration expected

July 31, 2014 – The Bridgepoint Midwest M&A Index remained well above the baseline at 110.4 for the second quarter of 2014. On a year-over-year basis, the index increased 18.7% from Q2-13, proving the positive predictions for 2014 accurate. The first six months of the year generated more middle-market deals than the same periods in 2012 and 2013.

Furthermore, the second quarter recorded the third highest median deal size since 2009. Midwest median deal size has continued to increase over the past 4 years. Activity has been driven by the strongest fundraising climate for private equity firms and companies since before the recession.

Midwest deal flow continues to reflect a strong environment. 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. M&A professionals expect overall transactions to increase over the remainder of the year with median valuations remaining strong locally, driven by aggressive capital markets support.

“The appetite for acquisitions remains strong. Our buy-side clients are increasingly looking to M&A for growth, utilizing the best capital markets environment in recent years to support that strategy,” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking. “The window remains open and continued activity is sure to translate into new opportunities 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 are also providing attractive leverage to support refinancing and recapitalization 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.