According to GF Data Resources, which tracks private equity deals ranging in value from $10–$250 million, enterprise valuations across that size range averaged 6.0X in the third quarter of 2010, and even the smallest size subset ($10–$25 million) reached an average of 5.8X EBITDA. These were pretty much A grade businesses with all their ducks in a row, however the trend is definitely upward. Private Equity as well as Strategic Buyers are sitting on a lot available, non working cash and credit markets are again aggressively soliciting deals. The result is that making a deal will be a lot less discriminating and the B grade business’s will definitely see their values rise above the distressed pricing of past couple of years.
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