Real Deals | Adapting to the Dealmaking Drought
Sep 2023
Originally posted by Real Deals on September 26, 2023.
2023 has seen slower deal activity across Europe and many are hopeful that the market will pick up in the near term. In a recent article, Real Deals discussed the state of the middle market deal environment with key players.
The transactions that close have multiples which are holding up well. On the leverage side, multiples are tailing off slightly and sponsors must bring more equity to get deals done.
The slower market has caused an increased demand from both sponsors and lenders. Creative solutions, such as preferred equity, earnouts and payment-in-kind toggles, that can help save money are also becoming more prevalent.
Richard Olson, Managing Director in Lincoln’s Valuations & Opinions Group, commented, “There’s a lot more refinancing taking place. GPs are extending maturities with existing lenders for 18-24 months, which lessens the pressure on the GP with respect to having to execute a deal at a lower multiple.”
Summary
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Lincoln International’s Richard Olson discusses the state of the middle market deal environment with Real Deals.
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