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Quarterly Edition, Q1 2017_____________________
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Argos Mid-Market Index
Evolution of Euro Zone Mid-Market Private Company Prices - Quarterly Index carried out by Epsilon Research
Q1 2017: Slight increase (+1.2%) to 8.6x EBITDA
The Argos Mid-Market Index has increased by 1.2% in the 1st quarter of 2017 to 8.6x EBITDA. The stability in pricing in the 1st quarter is in line with M&A Mid-Market activity in the Eurozone. In an economic context which continues to be favourable for mergers and acquisitions, the wait and see attitude of investors seems to be increasingly linked to European political risks (Brexit impact, forthcoming elections in the Eurozone). M&A activity in the United Kingdom has declined in the first quarter of 2017 to return to the levels of the first quarter of 2015, in line with the decline elsewhere in the Eurozone.
In the 1st quarter, prices paid by strategic buyers have stabilised at a high level (8.5x EBITDA). This stability hides the divergence between transactions in the segment €150m to €500m where multiples increased to 8.9x EBITDA, in line with stock markets, and those in the segment €15m to €150m where multiples dropped to 8.4x EBITDA. Strategic buyers seem to be more sensitive to the Eurozone geopolitical situation than private equity funds. The withdrawal of foreign buyers, situated outside of the Eurozone, continued in the 1st quarter: they represent 51% of trade buyers in the last six months compared to 57% in 2015.
Brexit impact ? After big increases in the 4th quarter of 2016 (+10% in volume), M&A activity in the UK has fallen in the 1st quarter of 2017 (-9.5% in volume/-15% in value) compared to the 1st quarter of 2016.
Next Index: July 2017
Argos Mid Market Index - Sample Analysis
| H2 2013 | H1 2014 | H2 2014 | H1 2015 | H2 2015 | H1 2016 | H2 2016 | Q1 2017 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sample Size | |||||||||||||||||||||||||||
| # deals retained for the index | 114 | 107 | 108 | 98 | 100 | 92 | 104 | 98 | |||||||||||||||||||
| Average Equity Value (€m) | 105.0 | 101.6 | 108.7 | 124.0 | 109.2 | 134.6 | 128.5 | 135.0 | |||||||||||||||||||
| Average N-1 sales (€m) | 116.3 | 183.3 | 139.7 | 154.8 | 120.8 | 158.4 | 133.3 | 118.6 | |||||||||||||||||||
| N-1 EBITDA margin | 13% | 13% | 13% | 16% | 15% | 14% | 12% | 15% | |||||||||||||||||||
| N-1 EBIT margin | 10% | 9% | 9% | 11% | 10% | 9% | 9% | 7% | |||||||||||||||||||
| Breakdown by size (equity value) | |||||||||||||||||||||||||||
| [15-49] €m | 45% | 45% | 36% | 36% | 42% | 25% | 37% | 38% | |||||||||||||||||||
| [50-99] €m | 21% | 20% | 22% | 21% | 29% | 29% | 15% | 14% | |||||||||||||||||||
| [100-150] €m | 10% | 15% | 18% | 12% | 6% | 17% | 12% | 11% | |||||||||||||||||||
| Breakdown by deal type | |||||||||||||||||||||||||||
| Acquisition | 76% | 71% | 76% | 65% | 22% | 35% | 69% | 30% | |||||||||||||||||||
| LBO | 24% | 29% | 24% | 35% | 78% | 65% | 31% | 70% | |||||||||||||||||||
| Breakdown by country | |||||||||||||||||||||||||||
| France | 26% | 33% | 18% | 30% | 25% | 34% | 28% | 26% | |||||||||||||||||||
| Germany | 21% | 16% | 19% | 17% | 15% | 16% | 20% | 20% | |||||||||||||||||||
| Italy | 16% | 18% | 21% | 23% | 24% | 26% | 13% | 15% | |||||||||||||||||||
| Benelux | 13% | 14% | 21% | 14% | 17% | 4% | 13% | 11% | |||||||||||||||||||
| Spain | 13% | 8% | 11% | 8% | 9% | 7% | 13% | 19% | |||||||||||||||||||
| Other (euro zone) | 11% | 11% | 10% | 8% | 10% | 13% | 13% | 9% | |||||||||||||||||||
| Breakdown by sector | |||||||||||||||||||||||||||
| Energy and Raw Materials | 10% | 10% | 15% | 10% | 4% | 13% | 16% | 15% | |||||||||||||||||||
| Building, Construction | 5% | 4% | 4% | 9% | 3% | 8% | 3% | 6% | |||||||||||||||||||
| Industrial Equipment | 16% | 9% | 26% | 18% | 21% | 17% | 13% | 17% | |||||||||||||||||||
| Consumer Products | 6% | 2% | 6% | 2% | 3% | 2% | 6% | 8% | |||||||||||||||||||
| Agro-Food | 9% | 6% | 5% | 5% | 10% | 3% | 8% | 10% | |||||||||||||||||||
| Healthcare-Pharmaceuticals | 11% | 17% | 13% | 8% | 12% | 9% | 8% | 8% | |||||||||||||||||||
| Wholesale, Retail | 5% | 6% | 5% | 13% | 6% | 6% | 7% | 4% | |||||||||||||||||||
| Transport | 8% | 16% | 8% | 8% | 11% | 11% | 8% | 6% | |||||||||||||||||||
| TMT | 23% | 18% | 13% | 21% | 20% | 16% | 18% | 17% | |||||||||||||||||||
| Business and Consumer Services | 7% | 12% | 5% | 6% | 10% | 15% | 13% | 9% | |||||||||||||||||||
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 - Q1 2017
| Date | Acquirer | Target | Country | Industries | Valuation multiples | See details |
|---|---|---|---|---|---|---|
| 27/03/2017 | Private Group led by Edmond de Rothschild Investment Partners | Potel & Chabot | France | Catering | * | 83097 |
| 20/03/2017 | FactSet Research Systems | BI-SAM Technologies (Business Intelligence Solutions for Asset Management) | France | Financial Markets software, Private & I-banking software, Software as a Service (SAAS) | ** | 83483 |
| 08/03/2017 | Colfax | Siemens Turbomachinery Equipment | Germany | Industrial Components | * | 83040 |
| 06/03/2017 | PORR Deutschland | Heijmans Oevermann | Germany | Heavy / Civil Construction, Commercial Building Construction | * | 83056 |
| 24/02/2017 | Private Group led by KPS Capital Partners | Winoa | France | Steel | * | 83331 |
| 23/02/2017 | Tennant Co | IP Cleaning (IPC) | Italy | Industrial Machinery | *** | 82986 |
| 22/02/2017 | TransDigm Group | SCHROTH Safety Products | Germany | Interior Parts, Aircraft Parts Suppliers | * | 82989 |
| 13/02/2017 | Victoria | Avalon & GrassInc | Netherlands | Building Materials & Fixtures, Durable Household Products | * | 82416 |
| 08/02/2017 | MaxLinear | Marvell Hispania Sl and G.hn Business of Marvell Technology Group | Spain | Telecommunications equipment | 83000 | |
| 06/02/2017 | Lear | Grupo Antolin Seating and Metal Business Unit | France | Structural Parts and Chassis, Interior Parts | ** | 82361 |
| 03/02/2017 | Interpump Group | Inoxpa | Spain | Pumps & PVF | *** | 83016 |
| 31/01/2017 | Stoneridge | Orlaco Products | Netherlands | Electronic Equipment | ** | 82389 |
| 31/01/2017 | Take-Two Interactive Software | Social Point SL | Spain | Videogame and software (consumer market) | ** | 82349 |
| 30/01/2017 | ATTRAQT Group | Fredhopper | Netherlands | Software as a Service (SAAS), Retail Software | ** | 82265 |
| 30/01/2017 | Sonic Healthcare | Medical Laboratory Bremen (Medizinisches Labor Bremen) | Germany | Laboratory Testing Services | ** | 82312 |
| 24/01/2017 | Eimskipafelag Islands hf | Mareco Integrated Logistics | Belgium | Logistics Services | * | 82278 |
| 03/01/2017 | Private Group led by TA Associates | Babilou | France | Day-care centers | * | 83486 |
| 22/12/2016 | Strauss Coffee | Norddeutsche Kaffeewerke (NDKW) | Germany | Coffee Roasting & Distribution | * | 82443 |
| 22/12/2016 | Telenet Group | Coditel Brabant ("SFR Benelux") | Luxembourg | Cable / Fixe Line Telecom | ** | 81857 |
| 21/12/2016 | Elis | Compania Navarra de Servicios Integrales (Indusal) | Spain | Industrial Cleaning | *** | 81886 |
| 19/12/2016 | Sioen Industries | Verseidag Ballistic Protection Oy | Finland | Personal Protective Equipment (PPE) | ** | 81944 |
| 16/12/2016 | Private Group led by Naxicap Partners | Ecotel Chomette Favor (E.CF) | France | Specialised R&W, Furnishings | * | 81970 |
| 16/12/2016 | IDEC | MMI Technologies (APEM) | France | Electrical Components & Equipments | ** | 83109 |
| 14/12/2016 | Private Group led by Chequers Capital | Alkern | France | Building Materials & Fixtures | * | 81503 |
| 12/12/2016 | Prince International Corporation (PMHC II) | Erachem | Belgium | Commodity Chemicals, Synthetic Fibers / Nonwoven fabrics | ** | 81919 |
| 08/12/2016 | Private Group led by ProA Capital | Go Fruselva | Spain | Fruit Juice Production | ** | 81926 |
| 05/12/2016 | Koninklijke Wessanen | Biogran SL | Spain | Food Complements, Bakery Products, Food R&W | *** | 81644 |
| 05/12/2016 | Fastweb | Tiscali Business Branch | Italy | VoIP Telephony Services | * | 82121 |
| 29/11/2016 | McCormick & Co | Enrico Giotti | Italy | Food Complements | *** | 81745 |
| 28/11/2016 | Matthews International | A+E Ungricht GmbH + Co Kg (Ungricht) | Germany | Printing | * | 82065 |
| 28/11/2016 | Cherokee (CGB) | Hi-Tec Sports International Holdings | Netherlands | Footwear (manufacture) | *** | 82145 |
| 25/11/2016 | Private Group led by Axio Capital Partners | SECURINFOR | France | IT Outsourcing | * | 82716 |
| 23/11/2016 | Grupo Industrial Saltillo | Infun | Spain | Metals, Industrial Components, Structural Parts and Chassis, Drivetrain | ** | 82082 |
| 16/11/2016 | Private Group led by Intera Partners | ISS Security Oy | Finland | Security Services | ** | 81725 |
| 16/11/2016 | Umanis | Cella | France | IT Consulting | * | 82483 |
| 14/11/2016 | Private Group led by Charterhouse Capital Partners | Optima (MEC3) | Italy | Dairy Products & Ice Creams | * | 82075 |
| 09/11/2016 | Mittel | Gruppo Zaffiro | Italy | Care Home | * | 81784 |
| 08/11/2016 | Private Group led by TCR Capital | Laboratoire Lescuyer | France | Food Complements | * | 82489 |
| 06/11/2016 | Private Group led by Bridgepoint | Sapec Agro Business | Portugal | Fertilizers & Pesticides - Manufacturers | ** | 81987 |
| 04/11/2016 | Private Group led by 3i Group | Ponroy Santé | France | Personal Products, Food Complements | * | 81264 |
| 04/11/2016 | Sonic Healthcare | Labor Staber | Germany | Medical Diagnostic Laboratory | * | 81111 |
| 03/11/2016 | DGF | Val de Seine Distribution | France | Bakery Products | * | 81223 |
| 31/10/2016 | Fresenius Medical Care AG & Co KGaA (FMC) | Xenios | Germany | Medical Equipment | * | 81689 |
| 28/10/2016 | Enghouse Systems | Presence Technology SL | Spain | Customer Relationship Management (CRM) | ** | 81259 |
| 28/10/2016 | Private Group led by JB Capital Markets | Vitaldent | Spain | Specialist Care | ** | 82092 |
| 27/10/2016 | Private group led by Ardian | SLV | Germany | Durable Household Products, Furnishings | ** | 80767 |
| 26/10/2016 | Private Group led by Investcorp | Agromillora Catalana | Spain | Horticulture | * | 82116 |
| 24/10/2016 | Private Group led by PAI Partners | SARquavitae Servicios a la Dependencia | Spain | Care Home, Home Care | ** | 80724 |
| 21/10/2016 | Private Group led by Quadrivio | Farmol | Italy | Cleaning & Hygiene Products | * | 81271 |
| 17/10/2016 | Sabelli | Trevisanalat | Italy | Dairy Products & Ice Creams | * | 81056 |
| 17/10/2016 | Private Group led by Qualium | Vulcanic | France | Heating Components & Equipments | * | 81197 |
| 14/10/2016 | Ferro | Cappelle Pigments | Belgium | Specialty Chemicals | ** | 81030 |
| 08/10/2016 | BA Vidro | Glass container business of Yioula Glassworks S.A. ( Glasstank B.V.) | Netherlands | Glass Packaging Manufacturers | * | 83106 |
| 07/10/2016 | M3 | Vidal | France | Databases, Book Publishing | ** | 81800 |
| 03/10/2016 | VT Holdings Co | Master Automocion SL (M Automocion Group) | Spain | Car Dealers | ** | 82049 |
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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