Conversations with Thought Leaders from the M&A Community

Andy Greenberg – Valuing Middle Market Companies

Posted by John Slater on May 9, 2008

Andy Greenberg - Valuing Middle Market Companies: Play Now | Play in Popup

Andy Greenberg Getting real valuation data on lower middle market acquisitions by private buyers has always been one of the most elusive aspects of the M&A business. While there have always been a number of data services available that highlight the valuation of most public company deals, these sources provide only spotty information on private transactions.

Our guest today is Andy Greenberg co-founder and CEO of GF Data Resources of W. Conshohocken, PA. GFDR is a relatively young company which collects, analyzes and reports on private equity-sponsored M&A transactions in the $10 million - $250 million value range. The firm has analyzed more than 500 transactions, reported by about 80 private equity firms, and provides industry drilldown data in more than 100 NAICS categories and sub-categories.

GFDR was launched by two Philadelphia-based deal professionals, Andy Greenberg and Graeme Frazier, who were frustrated by the scarcity of accurate data on middle market transactions. GF Data Resources offers its reports to subscribers on a quarterly basis and soon will make detailed valuation data continuously available through its website, www.gfdataresources.com.

You can access publically available summaries of information provided to the GFDR’s subscribers by clicking here. One of the most interesting data points that the company provided in its 2007 yearend report is the chart below, which confirms everyone’s suspicion that 2007 was a particularly good year for sellers of middle market firms, notwithstanding the market downturn in the second half of the year. Purchase multiples averaged 6.3 times EBITDA in 2007 plus Buyer’s Transaction Expenses (BTE) which added another 4.4% to the purchase price or an additional .3 times EBITDA.