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October 22, 2018

Buy Side, Sell Side, Carve Out, Bolt On (blog)

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PitchBook’s third quarter US PE M&A report released this month showed continued increases in dealmaking. Below are some notable highlights from the report:

  • Cash rich strategic buyers with an additional windfall from the 2017 tax rate reduction continue pushing buyout multiples – YTD September 2018 at 11.9x EBITDA.
  • Total deals closed YTD September 2018 were 3,501, a 2.1% increase over prior year.
  • With multiples at elevated levels, the buy and build strategy of integrating add-ons at lower multiples continues to proliferate; add-ons represented nearly 2/3 of all closed deals YTD September 2018, an all-time high.
  • Growth equity is a "growing" segment of PE, representing 13.2% of dollars raised in 2018, compared with 4.5% in 2017.

At CBIZ CMF, we are seeing similar dynamics in our Transaction Advisory practice, having completed 122 buy-side and 38 sell-side QofE engagements YTD September 2018. Furthermore, with elevated purchase price and execution risk inherent in most investments, our Financial Planning & Analysis (FP&A) team is seeing increased demand for Dashboard, KPI and Forecasting services.

Everything we see for 2019 points to continued optimism, despite the following potential headwinds:

  • Rising interest rates
  • Tariffs
  • Labor and crude oil driven inflation

To learn more about CBIZ CMF’s Transaction Advisory Services, please click here and FP&A Services, please click here.

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