Midwest M&A: How Long Will High Valuations Hold?

August 24, 2017 – The Bridgepoint Midwest M&A Index, a measure of corporate merger and acquisition activity in the region, decreased by 15.9% in the second quarter of 2017. Year-over-year, the index jumped 29.2% compared to Q2-16. Driven by slow organic growth opportunities, cheap debt and the proliferation of private equity, 2017 continues to be a year of high valuations coupled with a limited quality supply of companies for sale.

There is a general sentiment in the market that valuations have reached a peak and that change is coming. That said, there continues to be an excess of capital and firms chasing few best-in-class companies and investment opportunities.

“In our conversations with CIOs, fund managers and private equity firms, increasingly we hear that they are positioning for market change. We are 8 years into an equity bull market and markets are vulnerable to disruption. That said, over the near-term, it’s a great time to be a seller or to be raising capital, and a tough time to be a buyer or capital provider. How long valuations and capital availability will hold is harder to predict” said Bridgepoint Managing Principal Matt Plooster.

Chase Meyer of Omaha-based private equity firm McCarthy Capital adds, “it’s no secret that it is a seller’s market – the supply of capital, both debt and equity, continues to drive up valuations…eventually, the market will normalize…so every business owner should ask themselves whether they can take advantage of the current market conditions.”

To read the full report with additional commentary and Midwest M&A market data, please visit www.bridgepointmb.com/bridgepoint-insights

About Bridgepoint Merchant Banking

Bridgepoint Merchant Banking is a middle market investment 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 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.