Innovations in Comfort, Efficiency, and Safety Solutions.
Private Capital Markets
It's a Great Time for Business Owners to Raise Capital or Consider an Exit
England & Company
Despite wild daily swings in public equity markets,
economic headwinds, and geopolitical uncertainty, merger and
acquisition and financing activity involving privately-held companies
in the US remains strong, especially
within the intelligent building sector.
equity and debt capital are available to private business owners to
fund growth initiatives, and private equity investors (fueled by nearly
$570 billion of unused and available capital
commitments and strategic acquirers with under-levered balance sheets are providing a
highly liquid market for business owners considering an exit.
According to Pitchbook,
this abundance of capital, coupled with accommodating low interest rates and the
willingness of debt capital providers to support transactions, has
driven average middle-market transaction valuation multiples
Earnings Before Interest, Taxes, Depreciation, and Amortization
(“EBITDA”) from approximately 7.0x EBITDA in 2009 to nearly 12.0x
EBITDA in 2018.
Private capital markets continued their strength during the first half of 2019. However, we believe that business owners considering a financing transaction, or an exit, should be mindful of where we are in the macroeconomic cycle and that buoyant and accommodating private capital markets may not continue indefinitely. For business owners in the intelligent building sector, we cite the following when considering the timing for accessing the private equity and debt markets for growth or considering an exit.
England & Company is not calling a top in the market or any
type of dislocation like we saw in 2008, we do believe that we are very
long in a highly accommodative cycle in the private capital markets and
it is definitely our feeling that market conditions will not
appreciably improve from their current level. Therefore, if you
are considering a capital raise to fund an acquisition or organic
growth initiative or even an exit, we feel that there is no time like
the present to explore your options.
About the Author:
Glenn Tofil is a Managing
Director with England & Company. He focuses on power,
industrial, and infrastructure technology and services markets.
Glenn has significant experience working with shareholders and
executive teams of middle-market companies to create long-term value
through mergers and acquisitions and private capital raising
transactions. He can be reached by email at
About England & Company:
offices in Houston, New York, and Washington, DC, England &
Company is an independent investment banking and advisory firm
dedicated to the middle market. Since the founding of England in 2003,
the firm has provided honest and effective advice on mergers and
acquisitions, private capital raising, financial restructuring,
fairness oinions and valuations, and strategic advisory to the
executive teams, boards of directors, and financial sponsors of public
and private companies.
visit England & Company’s website for more information on our firm and to
download the latest edition of our Growth Wire Report on the
Intelligent Buildings Sector.
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