Private equity panel says market valuation multiples are down

Business Valuation UpdateVol. 7 No. 9
Special Reports
September 2001
M&A valuations
cost of capital, private equity, holding period, venture capital, warrants


The consensus of a panel of four private-equity partners at the Alliance of Merger & Acquisition Advisors (AM&AA) in Chicago, July 19, was that private equity funds are awash in capital to invest, but market value multiples are down from a year ago, and lenders have reduced tolerable debt-to-equity ratios for new loans. Thus, in spite of lower interest rates, the overall cost of capital is up from a year ago.