Private equity in small and mid-sized transactions may have started to turn upwards. According to the research at Pitchbook private equity middle-market deals bottomed in the 3rd quarter of 2009 and began to increase in Q4 with $15 billion invested in about 238 transactions; over half of those deals were less than $50 million in value. Interesting that while there were about half as many transactions in 2009 as compared to 2005, the value of those deals were about the same.
It appears that the equity required to get buyouts done on average for all buyouts is just about on par with 2006 at a little above 40% …but those deals in the middle-market with values between $25 million and $250 million are taking on average nearly 59% equity with 12% supported by sub-debt and the balance senior debt (as reported by GF Data Resources in February). They also reported that Q4 2009 enterprise values to EBITDA multiples for private equity deals increases slightly from Q3 to 5.2 from 5.1.
Anecdotically there is an increase in lower middle-market and middle-market deal activity this quarter …I see some enthusiasm and excitement hoping that the volume of activity holds, and that the deals can actually get closed.