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Quarterly Edition, Q1 2018_____________________
> Detailed Data on Euro Zone Multiples
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Argos Mid-Market Index
Evolution of Euro Zone Mid-Market Private Company Prices - Quarterly Index carried out by Epsilon Research
Mid-Market multiples hit historically high levels in the first quarter 2018
The Argos Mid-Market index rose by 4.4% to 9.5x EBITDA in the first quarter of 2018.
The increase in multiples is similar regardless of size of the transaction. It is also linked this quarter to the high prices paid by private equity firms to 10.0x EBITDA. Prices paid by strategic buyers are slightly up at 9.2x EBITDA, in line with quoted mid-market companies (to 9.6x EBITDA). This continued increase in multiples is driven by a favourable macro-economic and financial environment and a highly competitive field.
On the other hand, the M&A Mid-Market activity in the Eurozone has seen a sharp decline of 16% in volumes and 28% in value. It appears to be linked on one side to the scarcity of quality acquisition opportunities and on the other hand historically high prices levels for non-quoted companies, which discourages certain buyers.
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Next Index: 23 July 2018
Argos Mid Market Index - Sample Analysis
| H1 2015 | H2 2015 | H1 2016 | H2 2016 | H1 2017 | Q3 2017 | H2 2017 | Q1 2018 | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sample Size | ||||||||||||||||||||||||||||||
| # deals retained for the index | 98 | 100 | 92 | 104 | 85 | 103 | 89 | 98 | ||||||||||||||||||||||
| Average Equity Value (€m) | 124.0 | 109.2 | 134.6 | 128.5 | 149.7 | 147.9 | 140.5 | 134.4 | ||||||||||||||||||||||
| Average N-1 sales (€m) | 154.8 | 120.8 | 158.4 | 133.3 | 131.2 | 123.5 | 113.3 | 102.0 | ||||||||||||||||||||||
| N-1 EBITDA margin | 16% | 15% | 14% | 12% | 15% | 14% | 14% | 14% | ||||||||||||||||||||||
| N-1 EBIT margin | 11% | 10% | 9% | 9% | 8% | 11% | 12% | 8% | ||||||||||||||||||||||
| Breakdown by size (equity value) | ||||||||||||||||||||||||||||||
| [15-49] €m | 36% | 42% | 25% | 37% | 27% | 28% | 25% | 32% | ||||||||||||||||||||||
| [50-99] €m | 21% | 29% | 29% | 15% | 18% | 14% | 18% | 21% | ||||||||||||||||||||||
| [100-150] €m | 12% | 6% | 17% | 12% | 13% | 18% | 22% | 12% | ||||||||||||||||||||||
| Breakdown by deal type | ||||||||||||||||||||||||||||||
| Acquisition | 65% | 22% | 35% | 69% | 65% | 40% | 67% | 70% | ||||||||||||||||||||||
| LBO | 35% | 78% | 65% | 31% | 35% | 60% | 33% | 30% | ||||||||||||||||||||||
| Breakdown by country | ||||||||||||||||||||||||||||||
| France | 30% | 25% | 34% | 28% | 35% | 38% | 28% | 29% | ||||||||||||||||||||||
| Germany | 17% | 15% | 16% | 20% | 14% | 11% | 13% | 15% | ||||||||||||||||||||||
| Italy | 23% | 24% | 26% | 13% | 15% | 21% | 19% | 19% | ||||||||||||||||||||||
| Benelux | 14% | 17% | 4% | 13% | 12% | 10% | 11% | 9% | ||||||||||||||||||||||
| Spain | 8% | 9% | 7% | 13% | 11% | 7% | 14% | 7% | ||||||||||||||||||||||
| Other (euro zone) | 8% | 10% | 13% | 13% | 13% | 13% | 15% | 21% | ||||||||||||||||||||||
| Breakdown by sector | ||||||||||||||||||||||||||||||
| Energy and Raw Materials | 10% | 4% | 13% | 16% | 10% | 8% | 11% | 11% | ||||||||||||||||||||||
| Building, Construction | 9% | 3% | 8% | 3% | 5% | 5% | 7% | 5% | ||||||||||||||||||||||
| Industrial Equipment | 18% | 21% | 17% | 13% | 20% | 18% | 13% | 19% | ||||||||||||||||||||||
| Consumer Products | 2% | 3% | 2% | 6% | 2% | 4% | 5% | 3% | ||||||||||||||||||||||
| Agro-Food | 5% | 10% | 3% | 8% | 5% | 6% | 8% | 6% | ||||||||||||||||||||||
| Healthcare-Pharmaceuticals | 8% | 12% | 9% | 8% | 13% | 8% | 6% | 7% | ||||||||||||||||||||||
| Wholesale, Retail | 13% | 6% | 6% | 7% | 4% | 10% | 7% | 6% | ||||||||||||||||||||||
| Transport | 8% | 11% | 11% | 8% | 9% | 7% | 3% | 9% | ||||||||||||||||||||||
| TMT | 21% | 20% | 16% | 18% | 20% | 20% | 14% | 15% | ||||||||||||||||||||||
| Business and Consumer Services | 6% | 10% | 15% | 13% | 12% | 14% | 26% | 19% | ||||||||||||||||||||||
Argos Mid Market Index - List of Underlying Transactions
H1 2004 - H2 2004 - H1 2005 - H2 2005 - H1 2006 - H2 2006 - H1 2007 - H2 2007 - H1 2008 - H2 2008 - H1 2009 - H2 2009 - H1 2010 - H2 2010 - H1 2011 - H2 2011 - H1 2012 - H2 2012 - H1 2013 - H2 2013 - H1 2014 - H2 2014 - H1 2015 - H2 2015 - H1 2016 - H2 2016 - H1 2017 - Q3 2017 - H2 2017 - Q1 2018
| Date | Acquirer | Target | Country | Industries | Valuation multiples | See details |
|---|---|---|---|---|---|---|
| 20/03/2018 | Iceland Seafood International ehf | Oceanpath Seafoods | Ireland | Farming & Fishing, Sea Food | ** | 88608 |
| 25/01/2018 | Dechra Pharmaceuticals | AST Farma & Le Vet Beheer | Netherlands | Veterinary Pharmaceuticals | ** | 88864 |
| 04/01/2018 | Vignobles K | Chateau Bellefont Belcier | Gironde | Wine Production -Bordeaux | ** | 88374 |
| 22/12/2017 | Mondi | Powerflute Group Holdings Oy | Finland | Paper Industries | *** | 87651 |
| 21/12/2017 | Wartsila Oyj | Trident | Netherlands | Engineering and Technical Services | ** | 87672 |
| 15/12/2017 | Kingspan Group | Synthesia Group | Spain | Building Materials & Fixtures, Specialty Chemicals | ** | 87571 |
| 15/12/2017 | Assystem Services Deutschland | SQS Software Quality Systems | Germany | IT Consulting, Engineering and Technology Consulting | *** | 88101 |
| 14/12/2017 | Accenture | Rothco Holdings DAC | Ireland | Marketing Services | * | 88344 |
| 14/12/2017 | Horizon Global | Brink Group | Netherlands | Exterior Parts | ** | 87634 |
| 11/12/2017 | Kolb Distribution | Elementis Surfactants Business | Netherlands | Specialty Chemicals | ** | 87643 |
| 08/12/2017 | Croda International | IonPhasE | Finland | Specialty Chemicals | * | 87604 |
| 08/12/2017 | Medtronic | Crospon | Ireland | Diagnostic Medical Equipment | * | 88215 |
| 22/11/2017 | Galileo Global Education | Nuova Accademia (NABA) / European University Cyprus (EUC) | Italy | Schools | * | 87726 |
| 21/11/2017 | Private Group led by Ardian | Competence Call Center GmbH (CCC) | Austria | Call Centres | * | 88659 |
| 07/11/2017 | Private Group Led By Oakley Capital Investments | Career Partner Group (Apollo Global Germany) | Germany | Schools | * | 87755 |
| 02/11/2017 | Ropso Malta | Headlong | Malta | Online Gambling, Gambling | * | 88889 |
| 19/10/2017 | Daytona JV | Hallo Pizza | Germany | Restaurants & Bars | *** | 86609 |
| 19/10/2017 | Private Group led by Céréa Partenaire | Organic Alliance | France | Fruits and Vegetables R&W, Food R&W | * | 86799 |
| 04/10/2017 | Graphic Packaging Holding Co | Norgraft Packaging | Spain | Paper Packaging Manufacturers | ** | 87576 |
| 04/10/2017 | Materialise | ACTech | Germany | Machining Operations | *** | 87689 |
| 02/10/2017 | Ferro | Endeka Ceramics SAU | Spain | Specialty Chemicals | ** | 87697 |
Argos Mid-Market Index Breakdown
Access restricted to "Epsilon Eurozone Data" subscribers.
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NB: This part includes the transaction multiples (median, LTM):
I- Breakdown per main industry sectors
- Energy, Raw Materials, and Chemicals
- Building - Construction
- Industrial Equipment
- Consumer Products
- Agro-food
- Healthcare - Pharma
- Wholesale - Retail
- Transport
- TMT (Technology, Media, Telecommunications)
- Business and Consumer Services
II- Breakdown per main Euro Zone countries
- Germany
- France
- Italy
- Spain - Portugal
- Benelux
Euro Zone Mid Market M&A Trends
Access restricted to "Epsilon Eurozone Data" subscribers.
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NB: This part includes the following data:
- Euro zone M&A mid market activity (volume & value)
- Share of foreign buyers within industrial buyers
- Breakdown of foreign buyers (Europe -non Euro zone, North America, Asia, RoW)
- Share of listed buyers within industrial buyers
Euro Zone Mid Market LBO Trends
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NB: This part includes the following data:
- Euro zone LBO mid market activity (volume & value)
- Euro zone LBO exit mid market activity (volume & value)
- Share of SBOs within LBO exits
Argos Mid Market Index - Methodology
The Argos Mid-Market Index measures the evolution of euro zone private mid market company valuations.
Carried out by Epsilon Research for Argos Soditic and published every quarter, it reflects median EV/EBITDA multiples, on a six-month rolling basis, of mid market M&A transactions in the euro zone.
The preparation of the Argos Mid-Market Index is based on a rigorous methodology and in-depth scrutiny of M&A transactions making up the sample :
- Choice of the relevant multiple: the EV/EBITDA multiple is the most suitable for a European index as it is not impacted by the target’s financial structure nor by its policies regarding depreciation and provisioning (which vary in time and between countries). It is also the closest readily available proxy for operating cash flow.
- Sample of M&A transactions analysed, using the following criteria :
- acquisition of a majority stake,
- target based in a euro zone country,
- mid market : equity value in the €15-500m range (€15-150m up to H1 2013; €15-500m from H2 2013 onwards),
- certain activities excluded (financial services, real estate, high-tech),
- availability of relevant target financial data.
- Information sources are those used by Epsilon Research to prepare analysis reports on transactions available in its EMAT database:
- Professional partner databases such as: CorpfinDeals (transactions), CompanyQuery (company accounts),
- Publicly available information: company accounts, press releases, annual reports (buyers / sellers), press articles, etc.
- Comprehensive analysis of each transaction identified: research covering all available information; verifying, cross-checking, restating financial data; analysis of target activity and of the context of the deal; calculating and analysing acquisition multiples; rating the reliability of multiples.
The Index in perspective:
Following its launch in December 2006, the Argos Mid-Market Index has become a leading reference for private transactions, used by private equity funds, M&A advisors, investment banks, and accountants.
The strict methodology followed guarantees that the index is rigorous, relevant, stable and transparent. The goal is to offer market professionals and company managers a reference tool for understanding the evolution of acquisition prices in private company transactions.
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The Index is only an indication of the evolution of private company prices. It is relevant in relative, not absolute, value. The Index was not designed as a business valuation tool and cannot be used directly to value a company. |
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