Midmarket Private-Equity Valuations Regained Ground in Third Quarter

November 12, 2020 – Partner Brian Gallagher talks to The Wall Street Journal about recent trends in the midmarket including the rebound in private company valuations.

According to Mr. Gallagher, early efforts to shore up portfolio company liquidity and shift strategy paid off. “Private equity is built to withstand downturns. They’re very focused on cash flow and variable costs and pivoting businesses. A lot of pivoting happened in March and April. By May, it was clear but for certain sectors like restaurants, hospitality or travel, people were keeping their revenue the same or higher.”

Although the pace of new investments slowed considerably in the spring, Mr. Gallagher said it picked up over the summer. “By the time Labor Day rolled around everyone was swimming in deal flow. Companies that successfully survived the spring and summer are particularly attractive to buyers.”