This may come as a surprise. While the private equity market has been slowing for a year now and the economic outlook remains uncertain, the prices of companies held in the portfolios have not yet adjusted. Eurozone SME valuations fell by only 2% in the first quarter, according to the Argos index, which measures their evolution. Between January and March, these unlisted companies traded on average at a price corresponding to 9.7 times their gross operating income (Ebitda). A level certainly far from the 11.6 times paid at the end of 2021. But it remains high given the rise in interest rates, which increases financing costs and mechanically weighs on company valuations. "Good quality companies remain at high price levels," confirms Franck Portais, partner at investment bank Alantra.
One reason for this: "sellers are not really ready to make concessions on the...
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