GCG’s Q2 2019 Automotive M&A Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples and the state of the middle-market M&A environment.
Key findings include the following:
- Q2 2019 exhibited continued strength in the broader U.S. equity market, making for a positive first half of the year and a strong recovery from a volatile end of 2018. The Automotive industry has not recovered to the same extent as the broader market, however, certain segments have performed better than others, most notably the Dealers and Service Providers segment. North America-based OEM Suppliers also have shown strength, unlike their foreign counterparts which have underperformed since the segment’s peak in Q1 2018.
- Middle-market M&A activity within the Automotive sector dropped 37% in Q2 2019 from a strong first quarter. Despite the lower level of activity, total disclosed deal value increased by 23% over the same period, bringing the average deal value to $58 million, an increase of more than 130%. Strategic buyers continue to dominate activity in the Automotive sector, accounting for more than 90% of deal flow.
- Select publicly traded companies representing the key sectors across the Automotive industry traded at an average multiple of 10.3x EBITDA and 1.3x revenue. Trading multiples varied significantly across and within the four categories with the strongest multiples observed in the Dealers and Service Providers segment.
Click here for the full update.