TMT reaches highest average multiples among PE deals

TMT continues to be the sector with the highest average EBITDA multiples over the last six quarters at 11 times. This is according to research made by mid-market advisory firm Clearwater International, which has collected data on over 2,000 private equity deals announced across Europe.

The highest European valuations in the sector have been seen in the DACH and Nordic regions at 12.2 times and 11.7 times respectively.

TMT recorded the second highest volume of deals in the last six quarters at 39 (Q2 2017 was 49). Of those European TMT deals with recorded multiples, Clearwater closed more than 10%.

38% of the deals were UK – a six quarter high – maybe in part why many PE firms are telling us anecdotally that they are currently seeing fewer software deals in process during Q2 2018.

Almost two thirds were sub £50m deals – about typical for the sector based on the previous five quarters.

The DACH has the highest average EBITDA multiple for the quarter at 15 times – this is misleading as there was just one datapoint for the quarter. However this region has had multiples around 10% higher than the rest of Europe over the more representative data for the last 18 months.

Surprisingly, we continue to see negligible TMT PE deals out of CEE, despite the much talked about development talent there.

Southern Europe has seen a more active quarter than usual which we are seeing reflected in the activity from Clearwater’s Spanish and Portuguese offices.

TMT M&A Awards 2018

Comms Finance World 2018

Media Leaders Summit 2018

TMT Finance Asia 2019