CMF Surveys Middle-Market Private Equity Funds’ Year-over-Year Trends
PHILADELPHIA, May 12, 2016 — CMF Associates, private equity’s preferred operating partner for finance and financial leadership, today released the results of a survey completed by private equity executives at the Association for Corporate Growth’s InterGrowth conference in New Orleans, LA, and the M&A Source conference in Orlando, FL, May 3-4, 2016, and compared them with the results from the same surveys conducted at InterGrowth in 2015, 2014, and 2013.
Surveyed purchase multiples averaged slightly greater than last year, with 24% of respondents indicating a purchase multiple in the 8X range and 14% of respondents indicating a greater than 9X range, versus 15% and 15% last year, respectively. Furthermore, 41% indicated purchase multiples in the 7X range in 2016, versus similarly 39% in 2015.
Secondly, the peak average time to close a deal has decreased to four to six months, down from six to eight months in 2015. This decline would indicate that sellers, investment bankers and private equity groups are more deliberate with their decision making and process to close.
Finally, there remains optimism within the portfolio regarding expected aggregate revenue growth in 2016, with results similar to the prior two years. We were reminded during our meetings with 50+ middle-market private equity groups that add-on acquisitions still remain a key strategy for PE groups with regards to growing current platform businesses, and according to Pitchbook’s Q1 Report, add-ons represent nearly 70% of all buyouts.
About CMF Associates
CMF Associates, LLC, private equity’s preferred operating partner for finance and financial leadership, delivers transaction- and transition-focused financial, operational, and human capital solutions to private equity backed portfolio companies. Headquartered in Philadelphia and with offices in Chicago, New York, and Vancouver, CMF’s offering includes interim CFO, COO, and controllership services; M&A advisory including pre-transaction due diligence, carve out services and post- transaction integration; full-time executive search; and deal sourcing. To learn more, visit www.cmfassociates.com.