Q1 2018 summary

European PE deal multiples decline to 9.9x - the first time the average multiple has fallen to single digits since Q1 2016, representing a continued steady decline since Q2 2017.

TMT continues to be the sector with the highest average multiples over the last six quarters at 11.0x. The highest valuations in the sector have been seen in the DACH and Nordic regions at 12.2x and 11.7x respectively.

Financial Services returns to being the hottest sector in Q1 2018 with average multiple bouncing back to 11.4x, and also sees the lowest volatility across the sectors.

Data indicates that the Nordic region continues to be the hottest, with the highest prices paid over the last six quarters at 11.0x and the highest multiple in Q1 2018 at 10.5x.

Entry multiples in the Industrials and Chemicals sectors have continued to decline since Q3 2017 down to 9.1x in Q1 2018, potentially creating good value opportunities for investment.

Deals over €1bn continue to attract a premium due to scale with multiples reaching 12.5x in Q1 2018, while deals between €250m and €500m and between €500m and €1bn both saw unusually low multiples of 9.3x and 7.2x respectively, and the highest level of volatility.

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