Middle market LBO purchase price multiples declined from 12.3 times in 2022 to 11.4 times in 1Q23, the lowest level since 3Q20. While purchase price multiples declined, the equity multiple was only down minimally, to 7.3 times, from 7.4 times in 2022. In contrast, the leverage component dropped to 4.1 times in 1Q23 from 4.9 times in 2022. With leverage declining more than purchase price multiples, the loan-to-enterprise value levels on middle market LBOs declined to 38% in 1Q23, the lowest level on record since at least 1Q15.
(Past performance is no guarantee of future results.)
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Private Credit Defaults 101: Back to School
As Labor Day approaches, the unofficial end of summer is upon us. But, before we get too sad, there is also the familiar back-to-school energy.