Mergers & Acquisitions | M&A Trends

View original post from Mergers & Acquisitions on May 8, 2020 here.


TRENDS

The enterprise values of private middle-market companies dropped 7.5 percent in the first quarter, according to Lincoln’s Quarterly Middle Market Index, which is based on a database of more than 2,000 portfolio companies, primarily owned by private equity firms. That compares to a 16 percent drop for the S&P, indicating that private companies are outpacing public companies. Private companies were having their best quarter in years prior to the coronavirus crisis, says Lincoln International, the Chicago-based investment banking advisory firm that calculates the index. “The Covid-19 impact on the middle market is not yet fully felt and will not be until companies’ performance subsequent to the start of Covid-19 is disclosed,” says Ron Kahn, Lincoln managing director. “Until there is more visibility on the future performance of these companies, private equity groups and lenders will be cautious before deploying capital.” Declines were felt across all industries, with tech and healthcare faring slightly better than consumer and industrials. Decreases in the prices of oil resulted in the energy sector declining by 18 percent, the largest of any industry in the Lincoln index.

Summary

  • Ron Kahn, Managing Director and Co-head of Lincoln International’s Valuations & Opinions Group, discusses the Lincoln Middle Market Index with Mergers & Acquisitions.

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