Proprietary

MIDDLE MARKET

Database

Q4 2019

Valuations & Opinions Group

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Inside this Issue

Private equity backed portfolio company performance remains robust as market participants remain cautiously optimistic.

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  • Key Takeaways
  • Overview of Q4 2019 Database
  • Lincoln Middle Market Index
  • Middle Market Portfolio Company Performance
  • Enterprise Value and Leverage Multiples
  • Impact of EBITDA Adjustments
  • Quarterly New Issuances and M&A Transactions
  • Credit Market Environment
  • Distressed Assets
  • Valuations & Opinions Group Key Contacts

Quarterly Observed Third Party Select Transaction Statistics

Observed spreads on Junior debt and Unitranche facilities saw mixed movements throughout 2019 and remain below 2017 levels, reflecting continued competition in the private credit space

New Unitranche & Junior Debt Underwritings

Note: Summary statistics represent averages and are adjusted to exclude outliers

(1) Count is displayed as total Unitranche / total Junior (Unitranche count not included in Junior count); ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) Median EBITDA for both Unitranche and Junior facilities; 2019 Q4 increase due to smaller sample size

Spread Statistics for New Issuances

Leverage and enterprise value multiples observed during Q4 2019 remained in line with historical averages

Leverage of Observed 3rd Party M&A Transactions

EV of Observed 3rd Party M&A Transactions

Note: Summary statistics represent averages and are adjusted to exclude outliers; 2019 Q3 EV multiple increase due to abnormally high concentration of deals in higher multiple industries (Business Services, Healthcare, Technology) as compared to other quarters