Murray Devine Valuation Advisors has released its 2018 Q3 Private Equity Valuations Report, showing that during the first nine months of the year, PE firms paid a median valuation multiple of 11.9-times EBITDA for new investments.
The Q3 report, ‘This Train Keeps Rolling,’ breaks down private equity activity in 2018 between deal size and sector. While valuations remain near historic highs, multiples have come down slightly in all but the small-market. Still, debt markets and considerable sums of dry powder available to private equity investors have allowed sponsors to pay a considerable premium over strategic acquirers as of the end of Q3.
“Based on the data, it’s clear that sponsors remain confident in the near-term market outlook,” says Daniel DiDomenico III, a Senior Managing Director at Murray Devine and author of the report. “That being said, valuations have coming down slightly versus last year, even as investors gravitate to sectors such as technology and healthcare, which tend to fetch higher prices.”
The report includes data on the median valuations paid by US private equity firms as of the end of Q3, as well as debt multiples and M&A multiples broken down by deal size and by certain sectors.