Articles

Who Are You?

May 13, 2020

Last month’s commentary aptly titled Nobody Knows Anything elicited a strong response, mainly in agreement that the conventional methods for valuing most businesses are currently inoperative. If you cannot calibrate risk, you cannot come up with a risk-adjusted view of value. Thus, the deals that were and are getting done fall into a handful of categories in which the investment proposition makes sense notwithstanding the temporary loss of traditional metrics.

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“Nobody Knows Anything”

April 2, 2020

Attempts to gain perspective on the deal market in the midst of coronavirus have reminded me of this ageless observation from the screenwriter William Goldman:

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In the Thermocline

February 26, 2020

In its just-released February report, GF Data turned to an oceanographic term to describe the state of the middle market, noting that all of the action is in the thermocline the layer in deep water subject to significant temperature change even when the surface temperature is changing hardly at all.

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Heading for the Exits

December 10, 2019

As my GF Data partners and I travel the country, one question dominates every conversation regarding this improbably long-lived seller’s market: “What inning is it?”

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Still the Same

November 21, 2019

Generally favorable market conditions for private business sellers continued to prevail in the third quarter, according to GF Data’s just-released November report.

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Tracking the Hidden Rises & Falls in the Private Equity Industry

September 4, 2019
We are seeing valuations remain at unprecedented levels. But that does not mean every business is being valued as highly as it was a year ago. Some industries – auto parts, building products – have started to flag based on concerns about the economic cycle or trade policy. Others – health & wellness, direct-to-consumer – continue to find room to surge. What are the differentiators between the two groups? It isn’t just industry, but often sub-categories within industries getting different receptions from buyers and lenders.

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Party On?

August 18, 2019
The protracted strong market for business sellers continues to be a party that shows no sign of winding down, according to GF Data’s report on private equity deal activity in the second quarter.

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Debt Stays in the Driver’s Seat

May 28, 2019

As the current M&A cycle in the lower middle market marches onward, first-quarter 2019 data shows the continuation of a familiar pattern, where valuation multiples bounce off the ceiling set by leverage availability and willingness of sponsors to over-equitize transactions (or not), according to GF data’s recently published May report.

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