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Argos Mid-Market Index

Author: Epsilon research
Date: July 2014

Edition Q2 2014 - Sharp increase in a lacklustre M&A market

The Argos Mid-Market Index posted a sharp increase in the 2nd quarter to 8.6x historical EBITDA, while M&A activity stagnated at low levels.

Paris 23rd July 2014

Valuation multiples of Eurozone private medium-sized businesses increased by more than 10% this quarter from 7.8x to 8.6x historical EBITDA.

This growth was supported by both trade buyers (+7% compared with the previous quarter) and buyout funds, which increased 14% from 7.3x to 8.3x EBITDA. The large share of listed buyers (60%) approached its record high level reached in 2007, benefiting particularly from the rise in European equity markets.

However, this growth occurred in an M&A activity environment in line with the first quarter: a low transaction level in volume and value. Only acquisitions by industrial groups on the mid-market market saw a slight rebound in contrast with the sharp increase in large-cap deals. Even in an environment of investor confidence, M&A mid-market activity volume remains low, due in particular to the increasing scarcity of quality assets on the market.

Carried out by Epsilon Research for the European private equity group Argos Soditic, the Argos Mid-Market Index measures the evolution of Euro Zone private mid-market (€15m-€150m) valuations

Geography: Eurozone

Type of study: Consulting research

Relevant for: GP Mid-market, Limited partners, Associate, Fund of funds

Source: Epsilon research