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WHAT ARE YOU SEEING AS FAR AS VALUATION MULTIPLES IN THE M&A MARKET NOW? WHAT CAN WE EXPECT FOR VALUATION MULTIPLES IN THE FUTURE AND HOW IS THE PRIVATE EQUITY COMMUNITY REACTING?

WHAT ARE YOU SEEING AS FAR AS VALUATION MULTIPLES IN THE M&A MARKET NOW? WHAT CAN WE EXPECT FOR VALUATION MULTIPLES IN THE FUTURE AND HOW IS THE PRIVATE EQUITY COMMUNITY REACTING?

Our team has proudly shared several of our recently completed transactions on LinkedIn. We were able to sustain some very compelling valuations (double-digits, in certain cases). It took an incredible amount of commitment to get those deals closed during the pandemic and I have to recognize our clients and the acquirers for their efforts, as well. 

Going forward, I think it’s too early to tell what the sustainable trend might be in valuation multiples. It could be a challenge to achieve the peak multiples we’ve observed over recent periods, but I am optimistic about it for two reasons: 

  1. There seems to be an unwavering commitment on behalf of the federal government and central bank to inject liquidity into the economy. This will undoubtedly help credit markets; and
  2. I’ve had a lot of communication with fund managers recently and though deal intake is down, the consistent message is that they are starting to see an uptick in June and are committed to being aggressive about quality opportunities. Specifically, they are open to meeting management and touring facilities “virtually” and they are willing to plug holes in the debt structure with equity to get deals done.

The overarching sentiment is incredibly encouraging!

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