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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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Copyright © 2018, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

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