This chart analyses the average multiples by sector and region for the year ended 31stDecember 2017.
Overall multiple growth in 2017 was largely driven by the Industrials and Chemicals sector. The combination of high proportion of total European deals (26%) and significant growth in average price (9.4x in 2016 to 10.2x in 2017) raisedthe European average.
The most expensive sector in 2017 was TMT, where innovation and the rapid growth profiles of businesses attracted high prices from institutional investors. This was also the case in 2016 when the sector’s average multiple was 11.1x. The highest TMT multiples were paid in the DACH region at an average of 12.1x.
Financial Services and Healthcare also saw high and increasing multiples during 2017. Businesses in both sectors were backed by PE funds at an average of 10.7x.
Sponsors acquired Automotive businesses at an average valuation of 9.0x during the year, which represented the best value among sectors. This did little to depress the overall average, however, with Automotive deals accounting for only 2.7% of deals in the year.
France, Nordic and Southern regions all witnessed high acquisition multiples in the Financial Services sector. Approximately 50% of European Financial Services transactions were closed in the UK/Eire region.
CEE was the most expensive region in 2017, however this was driven by an outlying multiple in the Industrials and Chemicals sector and significantly fewer disclosed deal multiples.
Excluding the outlier CEE, the most expensive region for PE investors was the Nordic, where average multiples in 2017 grew to 11.0x compared to 10.6x in 2016.
Multiples in the Benelux, DACH and UK/Eire regions clustered around the overall annual average. Average prices paid in France remained at the same level as in 2016.
Lowest priced businesses in 2017 were in the Southern region with an average multiple of 9.6x.