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Global M&A Valuation Outlook 2014

American Appraisal is pleased to announce the publication of its Global M&A Valuation Outlook. This wide-reaching report, now in its third year, draws on in-depth analysis of American Appraisal’s own data from deals in 2013, compiled from its 24-country network of operations, combined with industry data on international corporate deal-flow. This report offers insight into the key issues that affect valuations in M&A over the next year.

Highlights from the report include:

• The outlook for global M&A is optimistic, with dealmakers expecting average EBITDA multiples to rise from 9.2x in 2013 to 10.5x in 2014, and 11.3x in 2015.
• Private equity multiples are expected to support this increase, with buyout multiples rising from 9.5x in 2013 to 11.2x in 2015, and exit multiples rising from 9.5x in 2013 to 11.4x in 2015.
• The TMT sector is thriving as consolidation drives up multiples, which are expected to hit a new post-crisis peak of 11.7x in 2015.

Asia-Pacific

• Economic reforms in China have revitalized M&A and are expected to boost valuations from 11.3x in 2013 to 12.6x in 2015.
• Multiples in India fell from 9.1x in 2013 to 8.4x in early 2014 due to economic stagnation and political uncertainty; however, recent election results are expected to boost investor sentiment and lead to rising multiples in the second half of 2014.
• Japanese buyers turn more to developed countries.

Americas

• Although North American deal activity was flat in 2013, economic growth and the availability of debt mean that multiples are expected to increase from 9.0x in 2013 to 10.4x in 2014 and 11.2x in 2015.
• Valuations in Latin America show consistent growth.

Europe

• Northern and Western Europe are the engine of M&A deals, with valuations expected to reach a five-year high of 10.7x in 2015.
• Central and Eastern Europe are expected to heat up in 2014.
• Southern Europe has weak economic growth and valuations are expected to fall in 2014 before slightly rebounding in 2015.

Read the full report for additional details and insight into three industry sectors: Energy, Mining & Utilities; Industrials & Chemicals; and Technology, Media & Telecom.