Despite the complex deal making environment the US Private Equity industry is facing, PE funds are still deploying capital. PE deal flow held steady in 2Q 2017, though it is still slightly below last year’s pace. Across the US, 886 deals were completed, totaling $153.6 billion in value (estimated). Aided by lower high-yield credit spreads and armed with $546 billion in dry powder, PE firms are continuing to deploy capital, despite high multiples and the shortage of quality targets.
Key takeaways in the report:
- PE fundraising through June 2017 has mirrored that of the 2007 boom. Capital commitments are on pace to surpass $220 billion.
- US M&A EBITDA multiples have regressed slightly in the first half of the year, to 10.5x. Meanwhile, the median debt percentage has increased to 56.3% as high-yield bond spreads reached a three-year low.
- Deal flow held steady in 2Q 2017, though it is still slightly below last year’s pace.
- The industry’s selling rate appears to be entering a new normal following the sale of excess company inventory from the last recession.
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