Small Business Investor Alliance Announces New Edition of Lower Middle Market Investment Insights

Semi-annual newsletter reveals fresh data and insightful look at trends shaping private capital investment in small business

WASHINGTON--()--The Small Business Investor Alliance (SBIA), the leading association for lower middle market private equity funds and investors, today announced the release of its second Lower Middle Market Investment Insights. As the premier newsletter focused entirely on the lower middle market, the newsletter provides up-to-date intelligence on private company M&A deal trends from GF Data®, the leading middle market M&A data provider, and the latest quarterly assessment of senior executive sentiment through the SBIA/National Center for the Middle Market (NCMM) Confidence Index.

The SBIA defines the lower middle market as comprised of companies generating between $10 million and $100 million in annual revenue, acquisitions or mergers valued at $10 million to $100 million in enterprise value, and private equity funds with up to $500 million in capital.

Revenue growth for lower middle market companies increased 6.8% in Q2, with these businesses outperforming S&P 500-listed firms that only demonstrated 3.4% growth in their top line for the same period, according to data from the National Center for the Middle Market (NCMM). Looking forward, sales growth among small businesses is expected to outpace large companies over the next year by more than six times, while revenue growth for large cap businesses next year is expected to diminish to less than 1%.

GF Data® found that valuation multiples in the lower middle market declined to 5.3X Trailing Twelve Months Adjusted EBITDA, while multiples in the upper end of the middle market rose to 7.6X, a spread not seen in years. Overall valuations averaged 6.4X year to date, whereas total debt averaged 3.8X in the first six months of 2014. Additional analysis of lower middle market deal trends by GF Data® can be found in Lower Middle Market Investment Insights.

Lower Middle Market Investment Insights empowers the investment decision-making process for our membership by providing them with the latest economic data, research, and insightful perspectives into the complete range of factors relevant to dealmaking in the small business market place: transaction volume, macroeconomic developments, employment growth, fundraising statistics, financial projections, leverage and M&A multiples, and analysis of current trends,” said Brett Palmer, President of SBIA.

In this edition of the SBIA newsletter, Chris Bradley from RCP Advisors provides an update on the state of the private equity market in Q2, drawing upon fresh data from PitchBook and Cambridge Associates. Along with this analysis, the latest update to the SBIA/NCMM Confidence Index – a measure of business confidence in the lower middle market – is also featured.

Click here to access the full newsletter: http://www.sbia.org/page/newsletter

About the Small Business Investor Alliance (SBIA)

The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for more than 50 years. For more information, visit www.SBIA.org or call 202-628-5055.

Contacts

Small Business Investor Alliance
Brett Palmer, 202-628-5055
BPalmer@sbia.org
or
BackBay Communications
Kelly Holman, 212-520-1385 ext. 4
Kelly.holman@backbaycommunications.com

Website

Release Summary

The Small Business Investor Alliance (SBIA) today announced the release of its second Lower Middle Market Investment Insights.

The Small Business Investor Alliance