STRONGER VALUATIONS FOR MIDWEST COMPANIES DESPITE SOFTER
M&A ACTIVITY IN Q3
Acceleration expected in the fourth quarter
November 7, 2014 – The Bridgepoint Midwest M&A Index declined slightly to 95.9 for the third quarter of 2014. On a year-over-year basis, the index decreased 11.4% from Q3-13. Despite the softening of the index in the latest quarter, M&A activity in the region remains at healthy levels.
Midwest M&A activity continues to reflect a strong deal-making environment. Valuations on a TEV/EBITDA basis increased to the fourth highest level since 2008, fueled by high demand, low supply for quality deals, record buyer cash stockpiles and easy buyer access to debt with historically aggressive terms. M&A professionals expect overall transaction closings to increase in the last quarter of the year.
“We continue to see strong deal activity in the Midwest market. Our buy-side clients have an increased appetite for acquisitions to augment organic growth,” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking. “We believe the robust pipeline of in-process transactions indicates a very strong end to the year for Midwest M&A.”
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 and terms 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.