The TTM — Q3 2015

Still no signs of a slowdown anytime soon
This year continues to be very active for M&A. Across the mid-market, companies are benefiting from rising sales and profits, as the U.S. economy enters its eighth consecutive year of expansion. Meanwhile, historically low interest rates continue to make debt an attractive financing option. As a result, U.S. M&A volume hit a record $1 trillion in the first half of 2015 (Thomson Reuters).

Livingstone’s pipeline doesn’t show any signs of cooling down either, with completed transactions up north of 20% year over year. One of the more interesting trends is the range of alternative lenders that have entered the mid-market. The leverage tolerance and aggressive terms from these available lenders, such as business development companies (BDCs), has pushed debt multiples up significantly.

We are also seeing family offices and fundless sponsors become viable and voracious acquirers alongside traditional private equity and strategic buyers. The confluence of debt availability and a broad buyer universe has resulted in historically high purchase multiples.


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