December 7, 2011 MULTIPLES RETURNING TO 2007 LEVELS

By Joe Berkery

M&A transaction value and volume are returning to pre-recession levels, according to the latest Berkery Noyes research. The total number of transactions (volume) for the six months to October 21, 2011 was 1,163, higher than the previous peak of 1,070 recorded for the six months prior to April 21, 2007, reflecting strong interest from both buyers and sellers. Fewer deals at the larger end of the spectrum drove down aggregate deal values, reflecting the greater concentration of activity among smaller and mid-sized companies in the $25 million to $200 million range.

Enterprise values were determined to be 1.9 X revenues, with multiples of EBITDA (earnings before interest, tax, depreciation and amortization) at 12.3 X. Though this is below the market peak during mid-2007, the uptred is both clear and significant.