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Quarterly Edition, Q4 2018_____________________
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Argos Mid-Market Index
Evolution of Euro Zone Mid-Market Private Company Prices - Quarterly Index carried out by Epsilon Research
Acquisition prices of non-quoted European SMEs reached a record high level, at 10.1x EBITDA
Paris, February 20th, 2019 – Argos Wityu, independent pan-European investment company, and Epsilon Research, online platform for the management of non-quoted M&A transactions, publish today the Argos Index® mid-market for the 4th quarter 2018. Since its launch in 2006, this index measures the evolution of Eurozone private Mid-Market company valuations for which a majority stake has been acquired by a private equity fund during the last 6 months.
Strategic buyers are driving the valuations up, with the Index reaching the historical record of 10.1x EBITDA.
This growth is underpinned by both strategic buyers who paid 10.7x EBITDA for transactions in the 4th quarter, as well as by private equity funds paying 9.8x EBITDA.
Prices are driven by the momentum in mid-market M&A activity in the Eurozone (+18% in volume, +17% in value over the second half of 2018).
The difference is particularly pronounced with mid-market quoted company multiples (1), which have fallen by 11% to 8.0x EBITDA (2). In the second half of the year, prices of private companies have seen their own momentum, independent of the evolution of stock markets (3). This is influenced by the record levels of cash, held by large corporations or raised by private equity firms investing in private nonquoted companies, by the need of strategic buyers to rely on acquisitions to find growth sources as well as the ever-increasing attraction of non-quoted companies for institutional investors (4), looking for returns, and which reflects the continuing increases in amounts raised by private equity firms and the levels of dry-powder.
(1) EV/LTM EBITDA, mid-market, Euro Zone listed companies (source: smallcaps.infrontanalytics.com).
(2) To be noticed: quoted company multiples are taken on December 31st, whereas the Argos Index® is a quarterly indicator.
(3) EURO STOXX TMI Small has fallen by 16% in the 4th quarter 2018.
(4) According to the Coller Global Private Equity Barometer, Winter 2018-19, 41% of European LPs expect to increase their allocations to private equity (vs 9% who will reduce).
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Argos Mid Market Index - Sample Analysis
| H1 2015 | H2 2015 | H1 2016 | H2 2016 | H1 2017 | H2 2017 | H1 2018 | H2 2018 | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sample Size | ||||||||||||||||||||||||||||||
| # deals retained for the index | 98 | 100 | 92 | 104 | 85 | 89 | 92 | 105 | ||||||||||||||||||||||
| Average Equity Value (€m) | 124.0 | 109.2 | 134.6 | 128.5 | 149.7 | 140.5 | 142.0 | 115.7 | ||||||||||||||||||||||
| Average N-1 sales (€m) | 154.8 | 120.8 | 158.4 | 133.3 | 131.2 | 113.3 | 130.0 | 112.0 | ||||||||||||||||||||||
| N-1 EBITDA margin | 16% | 15% | 14% | 12% | 15% | 14% | 13% | 15% | ||||||||||||||||||||||
| N-1 EBIT margin | 11% | 10% | 9% | 9% | 8% | 12% | 8% | 8% | ||||||||||||||||||||||
| Breakdown by size (equity value) | ||||||||||||||||||||||||||||||
| [15-49] €m | 36% | 42% | 25% | 37% | 27% | 25% | 28% | 36% | ||||||||||||||||||||||
| [50-99] €m | 21% | 29% | 29% | 15% | 18% | 18% | 21% | 20% | ||||||||||||||||||||||
| [100-150] €m | 12% | 6% | 17% | 12% | 13% | 22% | 16% | 18% | ||||||||||||||||||||||
| Breakdown by deal type | ||||||||||||||||||||||||||||||
| Acquisition | 65% | 22% | 35% | 69% | 65% | 67% | 26% | 71% | ||||||||||||||||||||||
| LBO | 35% | 78% | 65% | 31% | 35% | 33% | 74% | 29% | ||||||||||||||||||||||
| Breakdown by country | ||||||||||||||||||||||||||||||
| France | 30% | 25% | 34% | 28% | 35% | 28% | 32% | 34% | ||||||||||||||||||||||
| Germany | 17% | 15% | 16% | 20% | 14% | 13% | 15% | 20% | ||||||||||||||||||||||
| Italy | 23% | 24% | 26% | 13% | 15% | 19% | 14% | 15% | ||||||||||||||||||||||
| Benelux | 14% | 17% | 4% | 13% | 12% | 11% | 13% | 15% | ||||||||||||||||||||||
| Spain | 8% | 9% | 7% | 13% | 11% | 14% | 4% | 6% | ||||||||||||||||||||||
| Other (euro zone) | 8% | 10% | 13% | 13% | 13% | 15% | 22% | 10% | ||||||||||||||||||||||
| Breakdown by sector | ||||||||||||||||||||||||||||||
| Energy and Raw Materials | 10% | 4% | 13% | 16% | 10% | 11% | 11% | 5% | ||||||||||||||||||||||
| Building, Construction | 9% | 3% | 8% | 3% | 5% | 7% | 3% | 5% | ||||||||||||||||||||||
| Industrial Equipment | 18% | 21% | 17% | 13% | 20% | 13% | 19% | 23% | ||||||||||||||||||||||
| Consumer Products | 2% | 3% | 2% | 6% | 2% | 5% | 3% | 4% | ||||||||||||||||||||||
| Agro-Food | 5% | 10% | 3% | 8% | 5% | 8% | 9% | 6% | ||||||||||||||||||||||
| Healthcare-Pharmaceuticals | 8% | 12% | 9% | 8% | 13% | 6% | 4% | 8% | ||||||||||||||||||||||
| Wholesale, Retail | 13% | 6% | 6% | 7% | 4% | 7% | 9% | 5% | ||||||||||||||||||||||
| Transport | 8% | 11% | 11% | 8% | 9% | 3% | 11% | 7% | ||||||||||||||||||||||
| TMT | 21% | 20% | 16% | 18% | 20% | 14% | 21% | 23% | ||||||||||||||||||||||
| Business and Consumer Services | 6% | 10% | 15% | 13% | 12% | 26% | 10% | 14% | ||||||||||||||||||||||
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 - H2 2017 - H1 2018 - H2 2018
| Date | Acquirer | Target | Country | Industries | Valuation multiples | See details |
|---|---|---|---|---|---|---|
| 19/12/2018 | ATS Automation Tooling Systems | Comecer | Italy | Medical Equipment | ** | 92686 |
| 19/12/2018 | Sekisui Plastics | Proseat | Germany | Plastics Engineering , Interior Parts | ** | 92696 |
| 11/12/2018 | Parques Reunidos | Tropical Island Management | Germany | Amusement Park | *** | 92785 |
| 26/11/2018 | MTS Systems | E2M Technologies | Netherlands | Measurement & Test Equipment, Equipement for Test & Measuring | ** | 92866 |
| 26/11/2018 | AddLife | BIOMEDICA Medizinprodukte | Austria | Medical Equipment | ** | 92884 |
| 19/11/2018 | Private Group Led by Eurazeo PME | EFESO Consulting | Paris | IT Consulting | * | 92937 |
| 13/11/2018 | Private Group Led by EMZ Partners | Vignal Lighting Group | Rhône | Electronics / Electricity / Wiring | * | 92085 |
| 12/11/2018 | Infineon Technologies | Siltectra | Germany | Semiconductors | * | 92711 |
| 09/11/2018 | Private Group led by Vespa Capital | Arthur Loyd | Paris | Professional Services, Real Estate | * | 92771 |
| 08/11/2018 | Aphria | CC Pharma | Germany | Drugs Retailers, Pharmaceuticals | ** | 92067 |
| 05/11/2018 | Private Group Led by Partnera Oy and Tesi | Uusioaines Oy | Finland | Recycling | ** | 92050 |
| 30/10/2018 | Wolters Kluwer | eVision Industry Software | Netherlands | Business Process Management (BPM), Industrial Software | * | 91918 |
| 30/10/2018 | Ipsos | Synthesio | Paris | e-Marketing, Marketing Software | *** | 92706 |
| 29/10/2018 | Private Group led by Gimv | Société Comtoise de Spécialités Fromagères (La Comtoise) | Franche-Comté | Dairy Products & Ice Creams | * | 92116 |
| 25/10/2018 | Cigierre Compagnia Generale Ristorazione | Temakinho | Italy | Restaurants & Bars | * | 92578 |
| 25/10/2018 | Private Group led by Cerea Capital | Dairy division of Linxis (now Synext Group) | Deux-Sèvres | Industrial Machinery for the Food Processing Industry | * | 92802 |
| 20/10/2018 | Private Group led by Equistone Partners | Courir | Isère | Footwear (retail) | ** | 91783 |
| 15/10/2018 | Private Group led by Societe Generale Capitale Partners | Gris Group (Former Gris Decoupage) | Meurthe-Et-Moselle | Machining Operations | * | 92778 |
| 11/10/2018 | NRC Group | VR Track Oy | Finland | Heavy / Civil Construction, Special Purpose Vehicles & Equipment | *** | 91890 |
| 09/10/2018 | Isagri | Akanea | Haut-Rhin | Food Service Software , Transport Management System (TMS) | * | 92635 |
| 02/10/2018 | IRCA | Dobla | Netherlands | Confectionery | * | 92598 |
| 01/10/2018 | Honeywell International | Transnorm Group | Germany | Processing and Packaging Machinery | * | 91907 |
| 28/09/2018 | Hexpol | Mesgo | Italy | Specialty Chemicals | ** | 91592 |
| 27/09/2018 | Chart Industries | VRV | Italy | Containers | *** | 91616 |
| 26/09/2018 | Systemair | Koolair | Spain | Heating Components & Equipments | * | 91609 |
| 20/09/2018 | OnePoint | Weave | Paris | Business and Management Consultancy | * | 91341 |
| 20/09/2018 | Private Group led by CM-CIC Investissement | Voyageurs du Monde | Paris | Travel & Tourism | *** | 91996 |
| 18/09/2018 | Certify | Captio Tech S.L. | Spain | Enterprise Content Management (ECM) | * | 91397 |
| 18/09/2018 | Private Group led by Apax Partners | AEB (Azienda Enologica Bresciana) | Italy | Food Complements | * | 92749 |
| 13/09/2018 | ATS Automation Tooling Systems | KMW Konstruktion Maschinen & Werkzeugbau & Co KG | Germany | Industrial Machinery | ** | 91949 |
| 07/09/2018 | Private Group backed by MBO Partenaires and Amundi PEF | Arcado Groupe | Doubs | Delicatessen | * | 92627 |
| 03/09/2018 | Bilia | Verstraeten & Gent Store by Verstraeten | Belgium | Car Dealers | * | 91203 |
| 21/08/2018 | Vivalto Sante | Capio Gestion | Rhône | Clinics and hospitals | *** | 90851 |
| 11/08/2018 | Circet Groupe | KN Network Services | Ireland | Cable / Fixe Line Telecom, Mobile & Wireless Telecom Services | * | 92108 |
| 09/08/2018 | Private Group Led by Waterland Private Equity | Debuut Beheer (Horeca) | Netherlands | Restaurants & Bars | * | 92583 |
| 09/08/2018 | WiseTech Global | Taric | Spain | Transport Management System (TMS) | ** | 90744 |
| 03/08/2018 | Private Group Led by Alpha Private Equity | Calligaris | Italy | Furnishings | * | 91571 |
| 30/07/2018 | Teijin Frontier Co | JH Ziegler GmbH & Co | Germany | Synthetic Fibers / Nonwoven fabrics | ** | 90812 |
| 25/07/2018 | Private Group led by Perwyn | Isla Délice (Zaphir) | Val-D'Oise | Meat processing, Canned, Frozen and Cooked Food | * | 91875 |
| 24/07/2018 | AmRest Holdings SE | Sushi Shop Group | Paris | Restaurants & Bars | *** | 92513 |
| 12/07/2018 | HIL | Parador | Germany | Building Materials & Fixtures | *** | 91495 |
| 10/07/2018 | Private Group led by by MBO Partenaires, Arkea Capital and Amundi PEF | Groupe LT | Yvelines | Construction Equipement Rental Services, Long-term Rental of Vehicles | * | 90386 |
| 06/07/2018 | Royal Unibrew | Etablissements Geyer Frères | Haut-Rhin | Soda | * | 92663 |
| 03/07/2018 | Altus Group | Taliance Group | Paris | Private & I-banking software, Real Estate Software | ** | 90023 |
| 02/07/2018 | Koole Tankstorage Zaandam | Odfjell Terminals Rotterdam (OTR) & Odfjell Terminals Maritiem | Netherlands | Services to the Industrial Transportation Sector | ** | 91348 |
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. |
In partnership with
Index source of information:
EMAT - Epsilon Multiple Analysis Tool™
The Reference Source for Private Company Acquisition Multiples
