M&A Defined: A Multifaceted Tool
M&A is indeed a multifaceted tool. Everyone is intrigued by it. It appears to be a tonic for a company’s ills. It can divert investor attention away from a company’s troubles and lastly, yes it can create havoc on some companies!
In this version of Pak Flash we will provide a review of deal making from 2006 thru 2018 YTD. We review both the volume of deals and the valuation of deals, year by year. We also chose to present M&A transaction in two ways.
1. The Global Market including: Africa & Middle East, Asia, Europe, Latin America and US & Canada. 2. Europe/North America (EU/NA) We excluded deals that were less that $100mm trying to eliminate the high volatility of such smaller deals which are largely in the emerging market and generally skew average multiples negatively.
Our Global screen (below) on average generated EBITDA multiples of 7.3x for the 2006-2018 YTD period. For the period 2015-2018 YTD Global EBITDA multiples averaged 7.8x
Looking to the Europe/North America screen, we note that the two regions account on average for 82% of total Global deal volume! This drives our decision to separate Europe/North America from the Global screen.
EU/NA on average generated EBITDA multiples of 8.0x for the period 2006-2018 YTD. For the 2015-2018 YTD EU/NA EBITDA multiples average 9.0x
See the full Pak Flash Here