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February 2018

Q4 2017 Middle-Market M&A Update

Greenwich Capital Group LLC’s Q4 2017 Middle Market M&A Update offers insight into recent trends in the U.S. middle-market M&A environment. The report also provides a data-driven analysis on M&A trends in the Food & Beverage, Healthcare and Industrials sectors.

Key findings for our quarterly reports include the following:

Overall Middle Market M&A Update

  • Deal flow in Q4 2017 remained consistent with prior quarters and concluded another strong year for middle-market M&A. Transaction volume totaled 25,561 at an aggregate value of $168.2 billion for the year.
  • Valuation multiples reached a high of 10.7x EBITDA and average deal value continued growing to its recent high of $66 million in 2017, which is a testament to the overall strength of the M&A environment in the middle market.

Food & Beverage M&A Overview

  • Food & Beverage M&A remained healthy in Q4 with transaction volume and value up nearly 7% and 14%, respectively, over the previous quarter.
  • On an annual basis, aggregate deal value reach more than $9 billion in 2017, representing a 13% increase from 2016, which can be attributed to the ongoing trend of large Consumer Packaged Goods companies making acquisitions in excess of $100 million.

Healthcare M&A Overview

  • Healthcare M&A experienced declines in volume and value, which is likely due to uncertainty in the sector due to proposed changes in the Affordable Care Act, ongoing regulatory ambiguity with the Trump administration and Republican control of both the Senate and House of Representatives.
  • Despite the slowdown in activity, Healthcare valuation multiples reached a high of 12.5x EBITDA for the year.

Industrials M&A Overview

  • Industrials M&A ended the year with a total deal volume of 2,716 valued at $24.3 billion, representing decreases in both volume and value of 6% and 21%, respectively, from 2016.
  • Although activity was down from the prior year, various factors indicate a healthy M&A market for the sector, including an average valuation multiple of 9.7x EBITDA and a significant increase in activity from foreign acquirers.