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Quarterly Edition, Q2 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
Q2 2017: Continued Increase of the Index to 9.0x EBITDA
The Argos Mid-Market Index has increased by 4.7% in the 2nd quarter of 2017 to 9.0x EBITDA. This growth is primarily linked to the recovery of multiples paid by strategic buyers by 9.4% to 9.3x EBITDA and the continued increase in the pricing of transactions in the €150m to €500m segment, to 10.5x EBITDA (+6.1%), whereas multiples in lower Mid-Market segment (transactions between €15m and €150m) have only grown slightly to 8.5x EBITDA.
M&A Mid-Market activity in the Eurozone has fallen slightly in the 2nd quarter of 2017 compared to the previous quarter (-3% in volume), thus confirming the drop in activity over the whole of the first half (-14% in volume compared to the 2nd half of 2016). The drop in deal volumes is driven by transactions in the €15m to €150m segment (-17% in volume), which has not yet benefitted from the very favorable environment, likely linked to the longer time required to carry out acquisitions of SME’s.
M&A Mid-Market activity in the United Kingdom declined in the second quarter of 2017 and in the first half (-8% in volume compared to the 2nd half of 2016). However, since the 1st half of 2016, the fall in the market is less visible than in the Eurozone: in volume terms (-9% vs -17%) and in value terms (-3% vs -18%).
Next Index: November 2017
Argos Mid Market Index - Sample Analysis
| H2 2013 | H1 2014 | H2 2014 | H1 2015 | H2 2015 | H1 2016 | H2 2016 | H1 2017 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sample Size | |||||||||||||||||||||||||||
| # deals retained for the index | 114 | 107 | 108 | 98 | 100 | 92 | 104 | 85 | |||||||||||||||||||
| Average Equity Value (€m) | 105.0 | 101.6 | 108.7 | 124.0 | 109.2 | 134.6 | 128.5 | 149.7 | |||||||||||||||||||
| Average N-1 sales (€m) | 116.3 | 183.3 | 139.7 | 154.8 | 120.8 | 158.4 | 133.3 | 131.2 | |||||||||||||||||||
| N-1 EBITDA margin | 13% | 13% | 13% | 16% | 15% | 14% | 12% | 15% | |||||||||||||||||||
| N-1 EBIT margin | 10% | 9% | 9% | 11% | 10% | 9% | 9% | 8% | |||||||||||||||||||
| Breakdown by size (equity value) | |||||||||||||||||||||||||||
| [15-49] €m | 45% | 45% | 36% | 36% | 42% | 25% | 37% | 27% | |||||||||||||||||||
| [50-99] €m | 21% | 20% | 22% | 21% | 29% | 29% | 15% | 18% | |||||||||||||||||||
| [100-150] €m | 10% | 15% | 18% | 12% | 6% | 17% | 12% | 13% | |||||||||||||||||||
| Breakdown by deal type | |||||||||||||||||||||||||||
| Acquisition | 76% | 71% | 76% | 65% | 22% | 35% | 69% | 65% | |||||||||||||||||||
| LBO | 24% | 29% | 24% | 35% | 78% | 65% | 31% | 35% | |||||||||||||||||||
| Breakdown by country | |||||||||||||||||||||||||||
| France | 26% | 33% | 18% | 30% | 25% | 34% | 28% | 35% | |||||||||||||||||||
| Germany | 21% | 16% | 19% | 17% | 15% | 16% | 20% | 14% | |||||||||||||||||||
| Italy | 16% | 18% | 21% | 23% | 24% | 26% | 13% | 15% | |||||||||||||||||||
| Benelux | 13% | 14% | 21% | 14% | 17% | 4% | 13% | 12% | |||||||||||||||||||
| Spain | 13% | 8% | 11% | 8% | 9% | 7% | 13% | 11% | |||||||||||||||||||
| Other (euro zone) | 11% | 11% | 10% | 8% | 10% | 13% | 13% | 13% | |||||||||||||||||||
| Breakdown by sector | |||||||||||||||||||||||||||
| Energy and Raw Materials | 10% | 10% | 15% | 10% | 4% | 13% | 16% | 10% | |||||||||||||||||||
| Building, Construction | 5% | 4% | 4% | 9% | 3% | 8% | 3% | 5% | |||||||||||||||||||
| Industrial Equipment | 16% | 9% | 26% | 18% | 21% | 17% | 13% | 20% | |||||||||||||||||||
| Consumer Products | 6% | 2% | 6% | 2% | 3% | 2% | 6% | 2% | |||||||||||||||||||
| Agro-Food | 9% | 6% | 5% | 5% | 10% | 3% | 8% | 5% | |||||||||||||||||||
| Healthcare-Pharmaceuticals | 11% | 17% | 13% | 8% | 12% | 9% | 8% | 13% | |||||||||||||||||||
| Wholesale, Retail | 5% | 6% | 5% | 13% | 6% | 6% | 7% | 4% | |||||||||||||||||||
| Transport | 8% | 16% | 8% | 8% | 11% | 11% | 8% | 9% | |||||||||||||||||||
| TMT | 23% | 18% | 13% | 21% | 20% | 16% | 18% | 20% | |||||||||||||||||||
| Business and Consumer Services | 7% | 12% | 5% | 6% | 10% | 15% | 13% | 12% | |||||||||||||||||||
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
| Date | Acquirer | Target | Country | Industries | Valuation multiples | See details |
|---|---|---|---|---|---|---|
| 29/06/2017 | SimCorp | APL Italiana (now SimCorp Italiana) | Italy | Financial Markets software | ** | 84915 |
| 20/06/2017 | Private Group led by Sievi Capital | Indoor Group | Finland | Home Decoration & Furniture Retailers | *** | 84625 |
| 07/06/2017 | Porsche Automobil Holding SE | PTV Planung Transport Verkehr | Germany | Transport Management System (TMS) | * | 84666 |
| 22/05/2017 | Telia Company | Nebula Top Oy | Finland | IT Service Providers | *** | 84713 |
| 04/05/2017 | La Poste | Asten Sante | France | Home Care | * | 84832 |
| 03/05/2017 | United Parcel Service of America | Nightline Logistics Group | Ireland | Logistics Services | * | 84546 |
| 02/05/2017 | Truking Technology | Romaco Pharmatechnik | Germany | Processing and Packaging Machinery | ** | 84632 |
| 26/04/2017 | Kalorimeta AG & Co (KALO) | QUNDIS | Germany | Measurement & Test Equipment, Equipement for Test & Measuring | ** | 84598 |
| 25/04/2017 | Nidec | Secop Holding | Germany | Heating Components & Equipments | *** | 84608 |
| 11/04/2017 | Lantmannen ek for | K-maatalous Business of Kesko | Finland | Farming & Fishing, Agricultural & Construction Equipment | *** | 84295 |
| 07/04/2017 | Private Group led by Castik Capital | Wolters Kluwer Transport Services | Belgium | Software as a Service (SAAS), Transport Management System (TMS) | ** | 84732 |
| 05/04/2017 | Dover | Caldera Graphics | France | Computer Graphics Software, Industrial Software | * | 84484 |
| 05/04/2017 | Private Group led by Exponent Private Equity | DCC Environmental Division | Ireland | Recycling, Waste Collection Services | *** | 84508 |
| 05/04/2017 | Bid Corporation | Guzman Gastronomia | Spain | Fruits and Vegetables R&W | * | 84706 |
| 03/04/2017 | Spirax-Sarco Engineering | Gestra | Germany | Pumps & PVF | *** | 83879 |
| 31/03/2017 | Sphere Group | AEF Group | France | Plastic Packaging Manufacturers | ** | 83557 |
| 27/03/2017 | Private Group led by Edmond de Rothschild Investment Partners | Potel & Chabot | France | Catering | * | 83097 |
| 24/03/2017 | Private Group Led by Vertis SGR | Selematic | Italy | Industrial Machinery for the Food Processing Industry | ** | 83171 |
| 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 |
| 17/03/2017 | Private Group led by Providence Equity Partners | Baltic Broadcasting Businesses of Modern Times Group MTG | Estonia | Audiovisual - Production & Distribution, Radio | *** | 83256 |
| 10/03/2017 | Private Group led by Bain Capital Private Equity LP | Fintyre | Italy | Wheels & Tyres, Retail of Auto Parts | * | 83191 |
| 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 |
| 06/03/2017 | Private Group Led by CVC Capital Partners | Vitalia Home | Spain | Home Care | * | 83268 |
| 02/03/2017 | Edison | Assistenza Casa | Italy | Engineering and Technical Services, Electrical Contractors | * | 84412 |
| 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 |
| 22/02/2017 | Glanbia co-operative Society | Glanbia Dairy Ireland | Ireland | Dairy Products & Ice Creams | *** | 83156 |
| 22/02/2017 | Private Group led by Providence Equity | Nuevo Agora Centro de Estudios SL (Nace Schools) | Spain | Schools | * | 83513 |
| 17/02/2017 | Moog | Morgan Advanced Materials' Global Rotary Transfer Systems Business | Germany | Industrial Machinery | ** | 83162 |
| 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 |
| 31/01/2017 | Distribuidores Automáticos Vending (DAV) | Grup Ibervending | Spain | Vending Machines Manufacturers & Operators | ** | 83208 |
| 30/01/2017 | Mediawan | Groupe AB | France | Audiovisual - Production & Distribution | *** | 84264 |
| 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 |
| 10/01/2017 | Herambiente | Aliplast | Italy | Plastics Recycling | *** | 82375 |
| 09/01/2017 | ParkOhio | GH Electrotermia (GH Group) | Spain | Industrial Machinery | ** | 83185 |
| 04/01/2017 | ConvaTec Group | EuroTec Beheer | Netherlands | Medical Equipment | * | 82255 |
| 04/01/2017 | Diaxonhit (ExonHit) | Laboratoires Eurobio (Capforce Plus) | France | Biomedical Research Laboratory | ** | 82326 |
| 03/01/2017 | Private Group led by TA Associates | Babilou | France | Day-care centers | * | 83486 |
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
Access restricted to "Epsilon Eurozone Data" subscribers.
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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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