WEST CONSHOHOCKEN, Pa.--(BUSINESS WIRE)--GF Data Resources (GFDR), a proprietary database that collects detailed data on private-equity transactions valued between $10 million and $250 million, today released its Middle Market M&A Valuation Report for the second quarter of 2008. According to the report, deal volume and valuations both slightly increased from the first to the second quarter, but remained well below the levels experienced before the onset of the subprime lending crisis in mid-2007.“Middle market deal activity continues to be erratic and dampened by uncertainty over economic, capital-market and political conditions,” said Andrew T. Greenberg, CEO of GF Data Resources LLC. “The 91 firms that contributed to this report completed 23 deals in the second quarter of 2008, up from only 14 transactions in the previous quarter. However, this total of 37 deals in the first half of this year is well below the 65 transactions completed by the same firms in the first half of 2007.”
The primary valuation metric – Total Enterprise Value as a multiple of adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (TEV/EBITDA) – averaged 5.7x for the first half of 2008, down from 5.8x in the second half of 2007, and significantly off of the 6.3x average in the first half of ’07.
GFDR identified three trends within the second-quarter valuation data:
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