Private Equity Activity Down in 2017

​Pitchbook released its 2017 Annual US PE Breakdown report this week. The total value of private equity (PE) deals completed in the US in 2017 was estimated at $538 billion across 4,053 deals.

​This activity is down 8.9% from 2016, which is a bit counterintuitive at first since PE funds have record amounts of “dry powder” to invest. Three quarters of the follow-on funds raised by private equity funds during the year were larger than their predecessor funds. PitchBook’s recent 2018 Crystal Ball Survey report found that private equity firms had two main concerns. The first was a perceived “high-priced” environment, with the median EBITDA (earnings before interest taxes depreciation and amortization) in 2017 coming in at 10.5x. The second was a perceived lack of “quality” targets being on the market after the record volume of deals over the last several years.

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​The higher multiples in the overall M&A market (including PE buyers and strategic buyers) are fueled in part by debt. While the median EBITDA multiple stayed the same (10.5x) as 2016, the median percentage of debt used to fund the deal increased from 50% in 2016 to 54.3% in 2017. This is in line with the 10-year average of 55%. However, the leverage multiple of 5.7x EBITDA is the highest that PitchBook has recorded in its dataset.


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While megadeals receive the headlines, the lower middle market was well represented in deal flow in 2017. Deals under $25 million represented the largest segment of PE deals during the year, and deals under $100 million represented the majority of all PE deals during the year.

​Contact one of our team members if you would like more information on the specific statistics in your industry or geographic market.