GF Data’s 2010 Year End Report reveals deal volume in the middle market surged ahead in 4Q 2010, marking the most deals done since the onset of the economic crisis, and reflecting continued improvement in the overall M&A market.
The 155 private equity firms currently contributing to GF Data reported 58 completed transactions in the fourth quarter of 2010, closing out the year with a total of 147 completed deals.
For the third quarter in a row, completed deal volume was about double the rate of activity in the same period in 2009. PE firms in the GF Data universe completed 100 deals in the last six months of 2010, compared to 46 in the second half of 2009.
Average pricing held steady at 6.1x trailing twelve months adjusted EBITDA, the level reached in 3Q and the highest value since the first half of 2009, when “a flight to quality” pushed averages upward on lean volume.
The GF Data subscriber database now includes information on 1,104 transactions closed between January 1, 2003, and December 31, 2010 with enterprise values of USD10 to 250 million.
“We expected the 4Q report to reflect a lot of activity, based on the general sense of market improvement,” says Andrew T Greenberg (pictured), CEO and Co-Founder, GF Data. “However, we never expected the quarter to be a peak unto itself, driven by tax anxieties and other considerations. There was plenty of momentum earlier in the fall, and we see every sign that this tempo will continue through the early months of this year.”
Graeme Frazier, IV, Principal and Co-Founder of GF Data, says: “The broader market dynamics beginning to take hold in the fall continued into 4Q. The premiums being accorded for better performing businesses and for larger deals have never been higher,” said B “Total and senior debt multiples also held steady from 4Q, confirming that debt availability continues to improve at least somewhat in the middle market.”
