John Wiegand interviewed our own Rajesh Kothari on the state of the M&A environment in reaction to Blackford Capital's latest acquisiton.
Highlights of the interview include:
- “We’re definitely seeing a little bit of cooling in the interest in some automotive suppliers, depending on where they are in the segment of the market,” Kothari said.
- Despite the slight slowing in deal activity this year, multiples continue to be strong, particularly for well-structured, technologically advanced manufacturers, he said. Multiples for middle-market, highly specialized companies hover between five and seven times earnings before interest, taxes, depreciation and amortization (EBITDA).
- “We’re seeing a lot of buy-side interest in recent months more than anything else,” he said. “Buyers are saying, ‘We have more cash.’ The dynamic we’re seeing more and more is there’s a growing interest in the opportunity to grow through acquisition.”
- “There’s no sign in the U.S. economy domestically that things are slowing down,” he said. “We’re growing at a slow and steady pace and that’s helped people not go over their skis. The (vehicle) fleet is still old, people are buying new cars — there’s no sign that’s going to back off.”