Indemnification of reps and warranties continues downward trend GF Data® $10-250mm PE transactions

Apr 12, 2016

GF Data’s semi-annual view of trends in key deal terms other than price – indemnification cap, escrow/hold back and basket shows that the “seller’s market” conditions driving valuations continue to affect key deal terms as well.

  • The average cap on indemnification of reps and warranties for 2015 was 14.9 percent of TEV in the year to date – continuing the general downward trend of the last five years.
  • Average escrow/holdback in 2015 was 6.6 percent of TEV. This number has been remarkably stable, averaging between six and seven percent for the past five years.
  • Indemnification caps on deals with earnouts versus deals without earnouts showed a pronounced drop 2015 versus 2014.

 
GF Data® collects and publishes the most reliable information on PE sponsored lower middle market transactions. Over 200 PE firms contribute detailed transaction information to our proprietary data base.

We provide valuation, leverage and key legal deal term benchmarks as well as an online valuation data base sorted by 6 digit NAICS codes, date, deal size, revenue, revenue growth, adjusted EBITDA margins and TEV/Adjusted EBITDA multiples.

Investment banks, law firms, lenders and other middle market professionals use GF Data for strategic knowledge, marketing presentations and on target benchmarks for deals in the $10-250mm range.

Please contact Bob Wegbreit bw@gfdata.com or 610-616-4607 to review our full reports and subscription offers.

“GF Data is one of the only data sources that can provide our clients with valuation data specific to the size of their business from the perspective of financial buyers.”

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