Sponsors Chalk Up Huge M&A Year in 2016

Despite the number of individual transactions falling in the face of higher purchase-price multiples, 2016 was a record year for private equity, reaching levels not seen since 2007.

Recently, TM Capital Managing Director David Felts spoke with PE Hub Network’s Buyouts Magazine to shed some light on the state of the middle market. The article describes how lofty prices stoked an increase in add-on deals in 2016.  “At these multiples,” Felts tells Buyouts Magazine, “everyone has to try to drive down their total cost of ownership through relatively meaningful add-ons at lower multiples.”

“Plus,” Felts adds,”the cost or other synergies that fall out from integrating those add-ons can be argued as having a purchase multiple of zero. So the impacts up and down the food chain are huge.”

Check out the full article here for more insights