Soaring valuations in today’s frothy M&A environment have made it difficult for the average private equity firm to win deals. Even when a private equity firm is able to buy a company, the margin to create value is thin, due to the high price paid to acquire the company in the first place. According to S&P Capital IQ’s LCD unit, U.S. buyout firms paid an average of 10.3 times Ebitda for their purchases in 2015. That’s surpasses the 9.7 times Ebtida seen in 2007.

While the lower middle market is considered a bright spot in the overall M&A market, purchase price multiples also soared at the low end, making it difficult for private equity firms to compete. According to GF Data Resources LLC, which provides a database covering the lower middle market, valuations for deals for 2015 through the third quarter with a total enterprise value of $100 million to $250 million hit 9.1 times Ebitda, up from 7.8 times Ebitda from 2014 and 7.5 times Ebitda from 2013.

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