NEW YORK--(BUSINESS WIRE)--In its latest version of the U.S. Leveraged Finance Multiple EV-aluator report released today, Fitch Ratings provides an analysis of market multiples (enterprise value [EV]/EBITDA) and transaction multiples on an aggregated sector basis. The report also provides a granular view of the more than 400 high-yield issuers comprising the report on both an issuer- and subsector basis. The detailed break-down by subsector illustrates the considerable divergence in market multiples within each broad sector.
The report highlights how these market multiples have compared with transaction multiples of publicly traded U.S. companies and with the distressed valuation multiples employed by Fitch for purposes of its recovery analysis.
In conducting its analysis, Fitch made the following observations:
--The aggregate market valuation multiple (EV/EBITDA) for all companies in the last 12 months (LTM) increased to the highest in the last 10 years at 10.0 times (x) from 9.2x as of the LTM period of the last report (December 2013).
--Transaction multiples for completed deals in the LTM period ended June 30, 2014 have increased to 12.3x, which is 26% higher than 2013 and the highest over the last 10 years. Transaction multiples have been driven by higher equity prices, consolidation, improving economic sentiment, stockpiles of cash, low-cost debt, and limited organic growth opportunities. The three most active sectors in the LTM have been healthcare, retail, and technology.
--Fitch-employed multiples hover either below or in the lowest quartile of 10-year historical public market multiples.
The report is available on the Fitch web site at 'www.fitchratings.com' under the following headers:
Sectors >> Corporate Finance >> Leveraged Finance >> U.S. Leveraged Finance
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Leveraged Finance Multiple EV-aluator