Capstone Partners Middle Market Valuations Index

Business Valuations in Mergers and Acquisitions.

Capstone Partners’ 2021 Middle Market M&A Valuations Index examines EBITDA and revenue purchase multiples for middle market businesses, including an analysis of multiples across ten major industries. Leveraging market research and Capstone’s proprietary data, we seek to provide business owners and market participants greater transparency into the pricing dynamics of completed merger and acquisition (M&A) sale processes in the middle market, defined as transactions under $500 million in enterprise value.

2021 middle market M&A activity soared to record heights in a year characterized by feverish buyer appetite, expedited deal timelines, and seller-friendly valuations. Despite supply chain challenges, continuous COVID-19 variant disruptions, and rising inflation, a wealth of transactions flooded the private market – oftentimes overwhelming the capacity and bandwidth of dealmakers and third-party M&A service providers.

US Middle Market M&A Valuations Index

Average EBITDA Multiples by Industry

Market participants throughout 2021 shared that valuations had far surpassed prior year levels, owing to a return of buyers to the table and sellers that had recouped substantial COVID-induced losses. In analyzing our Middle Market M&A Valuations Index, the middle market appears to be much more resilient than the broader M&A market. The average EBITDA multiple for 2021 amounted to a healthy 10.7x, mirroring 2020, albeit on significantly higher deal volume.

Valuations among select industries have outperformed the broader middle market, capitalizing on favorable growth dynamics and elevated buyer appetite. The Technology, Media & Telecom (TMT) industry has led all middle market pricing, with a three-year average EBITDA multiple of 13.4x, exceeding the middle market average of 10.8x during the same time period.

Request our 2021 Middle Market M&A Valuations Index for access to the average EBITDA multiples across 10 industry verticals including Consumer, Healthcare, Business Services, Financial Technology, and Industrials. Also included in the report:

Capstone Partners Middle Market Valuation Index

  • Commentary on industry-specific middle market M&A volume and buyer breakdown
  • 2021 EBITDA multiples by transaction type
  • Possible explanations for the pricing dynamics
  • Capstone’s outlook for middle market deal activity and valuations in 2022
  • How impending interest rate hikes could impact valuations

2021 Middle Market M&A Valuations Index – Report Download

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Want to find out what your company could sell for?

Our industry coverage spans several verticals across the middle market, each comprising multiple subsectors. Contact us today to speak to an expert in your space who can provide a more personalized view of what multiples could look like for your company. We’d be happy to learn more about your goals and share advice on choosing the right time to sell and actionable steps you can take to elevate shareholder value.

 

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