Private Equity in the Last Decade

According to TermSheet which, in turn, is quoting PitchBook Data, there’s some interesting statistics coming from the private equity world during the last decade ending 2010. That includes the following:

Although ~81% of the actuals DEAL QUANTITY originated from medium to mid-sized businesses, over 90% of the actual CAPITAL INVESTED went to large corporate deals of >= $1 billion.

EBITDA multiples peaked in 2008, which was the market peak for private equity. Money was pouring into PE firms and a number of them were chasing the same deals. That led to an egregious inflation in multiples, up to a high of 11.5x EBITDA!!! Wow! What happened to the 3-5x EBITDA that was the de rigeour at the beginning of the decade? Oh, what’s that? That’s the sound of the glass breaking as those low multiples were thrown out the window!

For more information and statistics, check out PitchBook Data’s study.

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About Tiffany C. Wright - The Resourceful CEO

Tiffany C. Wright is the author of “The Funding Is Out There! Access the Cash You Need to Impact Your Business” and “Solving the Capital Equation: Financing Solutions for Small Businesses.” She is the founder of The Resourceful CEO, which helps owners of small/medium-sized businesses prepare their businesses for sale. Tiffany has an MBA from the Wharton School of Business, sits on non-profit boards and serves as a business mentor with the Cherie Blair Foundation.
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