M&A Quarterly Newsletter – December 2024
by Taureau Group
Market Summary
- Average purchase price multiples on completed deals in 3Q 2024 dropped to an average of 7.1x TTM EBITDA, .3x lower than the 2Q 2024 average.
- The industries showing the highest EBITDA multiples through 3Q 2024 were health care services at 8.9x and technology at 8.2x. EBITDA multiples for all manufacturing companies averaged 6.8x through 3Q 2024, compared to a 6.5x average in 2023.
- For the first three quarters of 2024, average valuations slightly declined to 7.1x compared to 7.2x for all of 2023, but still above the historical average of 6.9x.
- Add-ons accounted for more than 42% of deals through 3Q 2024, well above the 35% average in 2023.
- Valuations on companies with TEV between $10 million and $25 million reached an average of 6.4x compared to an average of 6.0x in 2023 and a half-turn above the historical average of 5.9x.
- Buyout deals recorded an average purchase price of 7.1x, a small improvement on the 7.0x average reported in the first half of 2024, and above the historical average of 6.8x.
- The average coupon on subordinated debt fell slightly in 3Q 2024, dropping to 11.3% compared to 11.6% in 2Q 2024.
- Average senior debt contribution for both platforms and add-ons improved through 3Q 2024 compared to all of 2023 reaching 41.5% across all deals compared to the average of 38.7% in 2023.
What’s New at Taureau Group
- October – Ann Hanna is named a 2025 Wisconsin Titan 100, an award recognizing Wisconsin’s Top 100 CEO & C-level executives.
- October – Patrick Doyle joined Taureau Group as an Associate.
- October– Taureau Group moved into the firm’s new, state-of-the-art office space located at 320 E. Buffalo Street, Suite 501.
- October– Completed the acquisition of an international strategic manufacturing and products company for an undisclosed client.
- November– Completed the sale of PAX Global to Veritiv Operating Company.
- December – Taureau Group published its 2024 Volume II Technology & IT Services Industry Report.
- December – Taureau Group published its 2024 M&A recap and 2025 outook.
- December – Completed the acquisition of certain product lines of Tinkering Labs for BirdBrain Technologies LLC.
- December – Taureau Group published its 2024 Volume II Packaging & Printing Industry Report.
While deal volume declined in the third quarter, there were positive signs of a market in recovery. More financially strong businesses completed deals in the third quarter compared to the prior two quarters, and add-on investments continued to play an outsized role in deal activity through the first three quarters.
Active Broad Acquisition Searches
- ESOP client looking to make acquisitions of educational services, and CTE products and software companies with revenues between $5 million – $20 million.
- Acquisition opportunities for a private company looking for metal and plastic low to medium volume manufacturers with revenues between $5 million – $30 million.
- Acquisition opportunities for a private equity platform company looking for building envelope solutions companies in Midwest U.S. with revenues between $5 million – $30 million.
- Acquisition opportunities for a private company looking for fuel distribution companies across Midwest and Eastern U.S. with revenues greater than $5 million.
- Acquisition opportunities for a private equity platform company looking for residential roofing, siding, and windows services firms with revenues greater than $20 million.
- Acquisition opportunities for a private equity add-on company looking for Aerospace, Defense and Space Exploration components manufacturers with revenues between $5 million – $30 million.
- Acquisition opportunities for an employee-owned company looking for advanced fabrication and VDC services; modular systems and data centers with revenues between $25 million – $100 million.
Featured Insights
- 2024 Volume II Technology & IT Services Industry Report – Download the report here.
- M&A Activity Accelerating into 2025 – Learn more here.
- 2023 Volume II Packaging & Printing Industry Report – Download the report here.
Market Statistics
Total Enterprise Value (TEV)/EBITDA*
| TEV | ’03-19 | ’20 | ’21 | ’22 | ’23 | YTD’24 | Total |
|---|---|---|---|---|---|---|---|
| 10-25 | 5.8 | 5.9 | 6.1 | 6.4 | 6.0 | 6.4 | 5.9 |
| 25-50 | 6.5 | 6.7 | 7.2 | 7.0 | 7.0 | 6.7 | 6.7 |
| 50-100 | 7.5 | 8.0 | 8.3 | 8.5 | 8.0 | 8.5 | 7.7 |
| 100-250 | 8.2 | 8.7 | 9.3 | 9.1 | 9.6 | 8.2 | 8.5 |
| Total | 6.6 | 7.0 | 7.6 | 7.5 | 7.2 | 7.1 | 6.9 |
TEV/EBITDA—By Industry ($10-$250M TEV)*
| Industry | ’03-19 | ’20 | ’21 | ’22 | ’23 | YTD’24 | Total |
|---|---|---|---|---|---|---|---|
| Manufacturing | 6.2 | 6.7 | 7.1 | 7.3 | 6.5 | 6.8 | 6.4 |
| Business services | 6.7 | 7.1 | 7.3 | 7.4 | 7.3 | 7.1 | 6.9 |
| Health care services | 7.4 | 7.6 | 8.1 | 8.4 | 8.9 | 8.9 | 7.6 |
| Retail | 7.0 | 6.5 | 8.3 | 8.0 | 6.0 | 6.1 | 7.0 |
| Distribution | 6.6 | 7.5 | 7.2 | 7.2 | 7.1 | 7.1 | 6.8 |
| Media & Telecom | 7.6 | 8.3 | 7.0 | 9.1 | 7.8 | 7.3 | 7.6 |
| Technology | 8.5 | 7.6 | 10.3 | 8.1 | 10.2 | 8.2 | 8.6 |
| Other | 6.3 | 6.2 | 7.3 | 6.7 | 6.9 | 7.0 | 6.4 |
Senior Debt/EBITDA—Splits by Period (platforms only)*
| TEV | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 |
|---|---|---|---|---|---|---|---|---|
| 10-25 | 1.9 | 1.9 | 2.2 | 1.1 | 2.2 | 2.3 | 1.7 | 2.9 |
| 25-50 | 2.2 | 2.2 | 1.5 | 2.9 | 1.4 | 1.9 | 2.0 | 2.5 |
| 50-100 | 2.6 | 2.4 | 2.2 | 2.5 | 2.1 | 2.3 | 2.7 | 3.0 |
| 100-250 | 2.7 | 3.0 | 3.3 | 3.5 | 3.3 | 3.0 | 2.8 | 2.8 |
| Total | 2.3 | 2.4 | 2.3 | 2.7 | 2.2 | 2.1 | 2.2 | 2.7 |
*Source: GF Data®. Information included from GF Data may not be used or re-published without permission from GF Data or Taureau Group.