Lincoln Middle Market Index Reaches All Time High “Notably, although revenue declined, the increase in earnings resulted from sponsors’ and management teams’ efforts to manage costs amidst the height of the pandemic.” “Looking back as we close the year, most could never have imagined the velocity of the recovery we have witnessed and it most certainly would not have occurred without sponsor and lender support,” noted Ron Kahn, Managing Director and Co-head of Lincoln International’s Valuations & Opinions Group. This is according to analysis from Lincoln International based on its proprietary database of over 2,400 portfolio companies primarily owned by private equity firms with median EBITDA of approximately $30 million.Īs further evidence of the effective changes management teams and sponsors undertook, despite the fact that revenue decreased 5% between 20, EBITDA grew approximately 6%. These efforts, together with the expectation of a continuation of strong performance improvement, resulted in enterprise value multiples reaching record highs for the second quarter in a row averaging 10.7x for Q4-0.9x greater than the previous year and 1.7x higher than the historical average. Lincoln International Releases Proprietary Q4 2020 Middle Market Indexĭespite the challenges stemming from the pandemic, the concerted efforts of private equity funds, private debt lenders and their portfolio company management teams led to a substantial resiliency in private company earnings in 2020.
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