The rapid deterioration of the global economy and continued turmoil within the credit markets pushed already anemic transaction volumes lower in Q1 ’09. Deal activity declined 39% from Q4 ’08 and 57% from Q1 ’08 for disclosed middle market transactions (Enterprise Value < $500 million and > $10 million). Limited credit availability, poor earnings and the inability to accurately forecast are forcing transactions to be postponed or completed at reduced purchase prices, thus driving down both volumes and multiples. Transaction multiples for Q1 ’09 were down an astonishing 1.5x averaging 5.7x enterprise value to EBITDA compared to 7.2x for all of 2008.
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