Confirming expectations, this week right wing candidate Jair Bolsonaro handily won the second round of the Presidential elections in Brazil, against left wing candidate Fernando Haddad, with a 55% to 45% majority. The President elect was swept to power on the back of anti-incumbent sentiment, fears about security, and a backlash against the left and the corruption scandals that have paralyzed much of the country for the past years

An ex-military man and longtime member of congress, Bolsonaro’s past track record is rather basic. However, his recent apparent adoption of pro-market views, and appointment of Paulo Guedes, a well-known University of Chicago trained economist who is one of the founders of what is now BTG, the largest Brazilian investment bank, and a successful Private Equity investor, has done much to calm the financial markets and certain parts of the business community. Guedes has no government experience however, and it remains to be seen if the relationship with the reportedly short-tempered president elect remains workable.

President Bolsonaro’s immediate challenge will be to deal with a fragmented congress, and obtain backing for much needed reforms on the social security, fiscal and tax fronts. His party (PSL) elected 51 congressmen and became the second largest block in congress, but that is still significantly below what is needed to approve reforms.

Looking ahead, it is highly probable that the financial markets will react favorably to the outcome, after initial profit taking right after the election.

We believe Bolsonaro will have a window of opportunity to achieve some of his (still unclear) objectives, as inflation pressure is low. FX volatility should decrease in the short term and the weak economic recovery will continue to pick up as low interest rates impact reach small and midcap companies. Approving the social security reform shall be the priority, and this is seen as the main path to recover long term fiscal balance and credibility in the international markets.

We believe the Central Bank will remain relatively independent (and if there are attempts to modify that relationship then the repercussions could be immediate). It is said that invitations were sent to the current CB president to stay in office.

Uncertainty regarding future developments on the international front, such as the Paris Climate Treaty, and environmental issues (regarding which his followers have made controversial statements), will mean that, along with his outspoken conservative stance on social issues, Bolsonaro may continue to get a negative reaction from a significant portion of the foreign press.

However, we believe fears of a return of military government (or any attempts to corrupt democracy) are totally misplaced and that institutions in Brazil are robust, despite noise in the system and Bolsonaro`s somewhat authoritarian rhetoric.

Lincoln Perspective

On the M&A front, we expect the pause that preceded the elections to continue, as players assess the new government. However, we believe a pick-up in M&A activity should come on the back of positive developments in the first half of 2019, especially if such reforms are approved and agendas to reduce the public deficit are implemented. We do not expect changes in antitrust policy, and if recent modifications to the labor legislation remain in place, we see that as positive to investor activity.

The post M&A and Investment Climate Post Election of New Brazilian President appeared first on Lincoln International.

Rob Brown, Lincoln Managing Director and CEO, North America, discusses the economic factors and other dynamics that are driving a very active 2018 for M&A and how a slow down might look for investors.

The post WBBM Noon Business Hour Podcast: Record M&A Activity appeared first on Lincoln International.

Chinese investment into Europe is on a roll. In the first half of 2018, China invested nine times more into Europe than North America, reaching $20 billion in deals, according to Baker Mackenzie.

Why the emphasis on Europe? European companies can offer leading technologies, well-qualified employees and a loyal customer base. Alternatively, Chinese investors promise fresh capital and better access to one of the largest and fastest growing markets in the world.

While a cross-border investment can benefit both partners, many Chinese investors are unsure how to maximize investment into Western companies. Indeed, Chinese investors’ long-term, strategic perspective is increasingly attractive, but as with any cross-border deals, there are numerous procedural and communication challenges that can impede a transaction.

Here are best practices we recommend for Chinese buyers investing in Europe:

Get Visible: Sellers are looking for serious investors to maximize their time and minimize the number of bidders with access to sensitive company information. They want to know who’s in the process, but in our experience, the limited information available online can make it challenging to provide a full profile of potential Chinese investors. By introducing themselves and their interest to an internationally operating M&A advisor ahead of a process, Chinese investors can improve their success rate.

Bring the Right Team: In addition to an M&A advisor with global experience, Chinese investors should bring a full international team to the table. International due diligence advisors and a global law firm will help minimize common communication and cultural issues. For example, in a recent transaction, a seller had documents in five languages covering five different jurisdictions in their data room. Without advisors with local footprints in each market, a proper audit of the data room would have been impossible. In addition, international lawyers are well-positioned to identify standard contract designs in each country and negotiate to build credible bridges between the two parties. Put simply: having the right people in the room allows management to focus on the economics and strategic advantages of the deal, rather than getting bogged down in the nuances.

Trust the Process: Every deal is different, and Chinese investors should work with their advisor to assess the desired speed of the buyer. For example, listed companies often want to sign a transaction before the end of their fiscal year. In a deadline-driven environment, speed and reliability of the buyer can be even more important than the price of the offer. It’s also critical to understand when you, as the investor, are entering the process. In some transactions, Chinese investors are brought in early to give them an advantage, but other times, a late-stage investor may spark interest. It’s critical to adjust course based on the timeline. A buyer who starts later in the process, for instance, should consider streamlining due diligence. Global M&A advisors can help minimize risk and point to factors, like strong German warranty claim laws, that will offer buyers protection even in an accelerated timeline.

Lincoln Perspective

The more complex the deal, the more critical it is to have transparency and informed communications between both parties. With interest in Europe-China deals high, both investors and sellers can outperform if they bring the right team of international advisors to the table and are open, credible and committed to the process.

The post Best Practices for Chinese Investors Entering Europe appeared first on Lincoln International.

The Restaurants industry is evolving as fast as it ever has, with globalization, changing consumer preferences and technology increasingly impacting concepts across the dining spectrum: from QSR to fine dining.  Restaurants are having to navigate one of the most challenging operating environments the industry has ever faced, with rising input costs (e.g., labor and food costs) and a growing number of alternatives for consumers.

To be successful, concepts need to be able to react and change to the latest trends, while continuing to listen to their consumer and serve consistent product at the right intersection of price, quality and convenience for that brand.

Important Industry Trends

Technology. Currently, technology is more evolved in certain stages of the consumer experience than others.  With rising labor costs, a key focus for every operator, technology will continue to play an ever-increasing role throughout the restaurants’ ecosystem.  From reserving a table to delivery to labor management to robotics, restaurants will need to continue to embrace the evolution, focus on the upside, and seek out partners with the expertise to provide the product and service that can optimize the operations and consumer experience.

Delivery, To-Go and Growth of The Virtual Kitchen.  According to a report from UBS’s research group the “Evidence Lab”, the global food delivery market is expected to grow from a $35 billion industry to a $365 billion industry by 2030. Given the growth of delivery and to-go, the “virtual kitchen” sector of the market will continue to attract investment, such as GV’s (fka Google Ventures) investment in foodservice start up Kitchen United, as well as Travis Kalanick’s investment in Cloud Kitchens.  Operators ability to drive incremental delivery and to go sales will be a large contributor to the success of concepts in the future. There will no doubt be a shakeout within the deliver sector, with operators seeking more transparency from their delivery partners.

Menu Trends. The continued growth in the free movement of people across the world is encouraging consumers to try new flavors and foods and fueling the growth of new concepts.  Globalization is making it easier for restaurants to source ingredients from all over the world and consumers, especially millennials, are willing to experiment more so than ever before.  Consumers are also increasingly seeking healthy options and a newfound focus on sustainability has also led to an explosion of farm-to-table cuisine. The benefits of eating healthy are more pronounced today than ever before, which will continue to fuel the heathification movement as it relates to menu options.  There will always be a place for the pizza or burger, but a growing consumer demographic will continue to demand flavorful and better-for-you alternatives.

Lincoln Perspective

The industry will always have room for new and exciting concepts that embrace changing consumer preferences. Technology will continue to drive change and restaurants will need to prove they can successfully adopt new technology to stay ahead of the competition and drive sales and profitability.  The recent challenges that some of the larger U.S. restaurant groups have faced will drive international expansion earlier in the growth cycle going forward, with regional concepts considering international growth before they have necessarily expanded across the U.S. This will also fuel interest from international strategic investors and drive an increase in cross border investment and M&A within the industry.

The post Change is on the Menu for Restaurants appeared first on Lincoln International.

Software is powering everything from supply chains to healthcare, and private equity firms have taken notice.

It’s well documented that private equity firms are sitting on more dry powder than ever before, and software is poised to see more than its fair share of those investment dollars globally, particularly in Europe where valuations are often lower than in the US. While PE buyers were historically less interested in software investing, they now have built more internal technical expertise, have a greater understanding of software revenue models and are focused more on expanding platforms than simply harvesting cash flow. In addition, whereas software investing was initially the province of specialist funds, more generalist funds have now gotten into the act.

The result? A surge in software deals:

• According to PitchBook, private equity deals in software have increased every year since 2010, reaching a high of 101 deals in 2017.
• In the first half of 2018, Pitchbook reports that software accounted for nearly 12% of all PE buyouts.
• In Europe, Mergermarket reports $11.2 billion in private equity software deals in 2017, nearing 50% of the overall deal value for the first time.

What’s driving interest?

Buy & Build: Part of the attraction of software as a service (SaaS) and software companies is their recurring revenue model that typically offers predictability and less risk. For private equity investors, there is also significant opportunity to make add-on acquisitions to software platforms in order to realize premium valuations for companies of scale. With the average PE hold period at three years or less, most businesses can’t grow organically fast enough to drive good returns on a large investment. By seeking bolt-on companies with complementary offerings, PE firms acquire more catalysts for growth that will earn the returns they need.

Essential Enterprise: Software isn’t just reshaping the tech industry – it’s transforming and creating opportunities in nearly every sector. Opportunities to capitalize on advancements in IoT, AI, cybersecurity, payments, and other technologies, have led corporates and private equity funds to increase their investment in the companies driving those advancements. As a result, competition is heating up. EY reports that non-tech acquirers (PE firms + non-tech strategics) paid a 15% premium on software acquisitions in 2017, compared to tech-acquirers. EY also reports that assets in business intelligence, IoT and security earned the highest valuations, while CRM and ERP saw the most deal activity in the first half of 2018.

Lincoln Perspective

We foresee no slowdown in activity in the near term. Although valuations are certainly robust, the unique characteristics of software subscription models – meaningful growth with downside protection – are keeping most acquirers solidly in the game. And although the U.S. is the most active market for software deals, Europe is also a pioneer in the growing regulation of data and privacy, which is impacting all industries and is creating opportunities for software companies to assist in data tracking, management and protection.  When it comes to deal outlook, we see continued potential for platform deals and add-ons, as well as strategic partnerships.

The post PE Firms Seeking Software appeared first on Lincoln International.

As the deadline for the UK to leave the European Union edges ever closer, the M&A market has been outperforming expectations. According to the recent Mergermarket Trend Report, UK M&A transaction value in the first half of 2018 was 48% higher than the same period a year ago, at £109.7 billion.

As we discuss in a new article that originally appeared in The Times, there are a few factors for continued activity:

• Interest from North American investors: With the pound trading at near all-time lows relative to many currencies, including the U.S. dollar, the UK offers the opportunity to invest in an attractive long-term market at a reasonable price.
• Interest from Asian investors: While Asian investors are taking a balanced approach, they are not demonstrating any real concern about the post-Brexit environment. The tech sector continues to be a hot target, as there is a desire to enhance both knowledge, skills and market penetration.
• Strong sector performance: Healthcare, TMT and industrials are performing well due to advanced preparation and scenario planning, the promise for a boost in domestic manufacturing, and technology disruption creating opportunities in adjacent industries like fintech.

Lincoln Perspective

Despite market uncertainty, pre-Brexit deal activity has been strong. As the UK inches toward the March 2019 withdrawal deadline, however, we anticipate a temporary period of readjustment where banks are likely to be conservative, leading to a reduction in M&A activity. While the longer-term outlook is positive, it’s vital that any business looking to sell starts the process early and targets the most appropriate potential buyers.

To read more on the outlook for UK M&A, read our full special report in The Times here.

The post Brexit Impact on UK M&A appeared first on Lincoln International.

Remember when you had to wait to hail a cab, could only watch a show on a weekly basis and had to go to a store to buy groceries? That was less than 10 years ago.

It is clear how industries like transportation, entertainment and retail have evolved, but healthcare is still in relatively early stages of technology-driven transformation. Sophisticated companies and investors recognize that everything from where a patient accesses care to how they pay for it are changing rapidly.

As healthcare organizations strive to improve the patient experience and clinical outcomes while lowering costs, there are three major trends impacting the deal environment.

• Tech Improves Healthcare Delivered in the Home: Historically, healthcare has relied on physicians, nurses and other trained medical staff to treat patients in an institutional brick-and-mortar setting. Now, more business models are integrating technology to complement alternate site efforts, decrease costs and bring care closer to the consumer and their home. In fact, a recent BDO/NEJM Catalyst survey on the future of elder care found that 44% of healthcare organizations say that by 2020, they will invest more in-home health than they will in other care settings. Strategic deals like CVS-Aetna are driven in part by home and community-based care opportunities and their promise of more convenient and cost-effective patient care. Keep an eye on the Medicaid realm, which includes high-need and high-usage patient populations that can be huge cost drivers for state budgets. Telehealth, wireless sensors and mobile connectivity could dramatically improve the delivery of healthcare in the patient’s home.
• PHI: New opportunities, new challenges: With the digital revolution comes the rapid increase in the collection and usage of personal health information. From this data, valuable new population-level and clinical understandings are being unlocked identifying new care pathways, reducing gaps in care and medical errors, and improving adherence, outcomes and satisfaction. Technology is also creating avenues for greater patient engagement in their own care, which results in better disease prevention. Health organizations and investors alike are placing new emphasis on securing patient health data and ensuring Health Insurance Portability and Accountability Act (HIPAA) compliance as part of the M&A transaction process. In addition, organizations and investors must think seriously about what future investments will be required to ensure today’s software is scalable and can evolve as technology, data and regulatory requirements change in the future. PE investors are paying premiums for companies with scalable, compliant technology that streamlines workflows, promotes patient engagement or increases clinical insights.
• Value-Based Business Models Command the Strongest Valuations: According to Kaufman Hall, there has been an increasing rate of hospital and health system M&A activity each year since 2009 (with one exception in 2016). Health organizations are now valuing actual clinical results over merely having clinical capabilities. Regardless of any uncertainty in the market, whether it be disruption in D.C. or a potential softening of the economy, the migration away from fee-for-service will persist. Companies focused on bundled payments, outcomes-based reimbursement, and risk-sharing models are definitely garnering premium valuations.

Lincoln Perspective

Every constituency in healthcare is being incentivized to reduce costs, share risks, improve efficiency, improve the patient experience and quantify outcomes. These efforts require interoperable technology to deliver on the vision of delivering better care to more people at an affordable price.  After decades-long, systemic under-investment in technology across the healthcare industry, strategic and PE investors are driving change, paying a premium for differentiated technology and demanding (protected) data that documents results.  Payor, provider and other vendor organizations are restructuring their workflows to adapt to these new realities. Deal flow continues to increase, and in the near-term, we see no obvious structural threats that put these trends at risk of reversing course. We expect disruption will continue to drive platform deals and new strategic partnerships across the healthcare continuum.

The post Doctor’s Orders: Disruption Driving Deals appeared first on Lincoln International.

Deal insights for Chinese and European business leaders from Lincoln’s investment banking advisors.

The post China | European M&A Opportunities appeared first on Lincoln International.

Lincoln MMI demonstrates that privately held middle market companies are generating returns comparable to major public stock market indices, but with less volatility

Lincoln International, a leading global, mid-market investment bank, today released the third quarter 2018 issue of its Lincoln Middle Market Index (Lincoln MMI). The Lincoln MMI is a unique index measuring middle market enterprise values. The first-of-its-kind index provides a useful benchmarking tool for investors in private companies and private equity firms, allowing them to track how comparable enterprise values change over time and correlate to the public stock market.

Key observations of the Q3 2018 Lincoln MMI include:

• Year-to-date middle market enterprise value growth through Q3 2018 of 9.2% approximates that of the S&P 500 of 9.4%, as both Lincoln MMI and S&P 500 EV values increased in Q3 prior to the October 2018 correction.
• While performance and multiples both improved for the Lincoln MMI and the S&P 500, multiple expansion was more pronounced in the public markets.
• Lincoln MMI 2018 Q3 growth of 3.4% was the second highest quarterly growth since inception and the strongest growth since Q3 2016.
• The Lincoln MMI continues to demonstrate that valuations of U.S. middle market companies are less volatile because of lower volatility in enterprise value multiples compared to the S&P 500; in the long run, earnings remain the driver of enterprise value growth for all companies.

“For the quarter ending September 30, 2018, middle market growth was the highest in two years and the second highest since the first quarter of 2014. The continued, steady enterprise value growth of the middle market was driven by improved earnings as earnings have increased in each of the last seven quarters,” said Steve Kaplan, Neubauer Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business, who assists and advises Lincoln about the index.

“The strong overall performance of the Lincoln MMI in Q3 2018 was driven primarily by business service companies as well as healthcare, industrial, and technology companies,” Ron Kahn, Managing Director and head of Lincoln’s Valuations & Opinions Group added, “Despite the risks of greater tariffs, interest rates, and political uncertainty, valuations continued to expand through September 30, 2018 as both earnings and multiples improved this quarter. We are certainly aware that through September 30, 2018, we were in a period of strong stock market performance and this quarter’s results do not reflect the unanticipated stock market correction of October 2018.”

Kahn continued, “The Lincoln MMI enables investors in private companies and private equity firms the ability to compare or benchmark their investments against an index comprised of hundreds of privately held companies. Moreover, the Lincoln MMIdemonstrates that privately held middle market companies generate returns comparable to major public stock market indices but with less volatility.”

Industry Sub-indices & Key Observations:
Lincoln breaks down the Lincoln MMI into six industries (business services, consumer, energy, healthcare, industrials, and technology), providing unique insight into how the performance of middle market companies varies by sector.

• Middle market technology companies have increased in value for ten consecutive quarters, averaging quarterly growth of over 4.0% and making technology the strongest performing industry since Q2 2017.
• While private companies in the business services, healthcare, industrials, and technology sectors experienced strong third quarter performance, business service companies grew over 7.0%, which was 3.0% more than any other industry.
• Consumer enterprise value growth continues to lag behind that of all other industries except energy, thus dragging overall middle market performance.

About the Lincoln Middle Market Index
The Lincoln MMI is the only index that tracks changes in the enterprise value of U.S. privately held middle market companies, primarily owned by private equity firms.

The Lincoln MMI seeks to measure the variation in middle market companies’ enterprise values by analyzing the aggregate change in both company earnings as well as the prevailing market multiples of over 400 middle market companies, each generating less than $100 million in annual earnings. The Lincoln MMI is calculated using anonymized data on an aggregated basis by Lincoln’s Valuations & Opinions Group, which offers unique insights into the financial performance of thousands of portfolio investments of financial sponsors, business development companies, and private debt funds.

The methodology was determined by Lincoln in collaboration with Professors Steven Kaplan and Michael Minnis of the University of Chicago Booth School of Business. While other indices track changes to a company’s revenue or earnings, the Lincoln MMI is different in that it tracks the total value of these companies. Significantly, the large number of middle market companies used to create the Lincoln MMI helps ensure that the confidentiality of all company-specific information used in the Index is maintained.

Starting with a benchmark value of 10,000 as of March 31, 2014, the Lincoln MMI increased to 13,598 as of September 30, 2018, resulting in an annual compounded growth rate of 7.1 percent per year since inception.

Relationship of the Lincoln MMI to the S&P 500

(Note: Both the Lincoln and S&P 500 EV returns above reflect enterprise values)

View full report

Important Disclosure
The Lincoln Middle Market Index is an informational indicator only, and does not constitute investment advice or an offer to sell or a solicitation to buy any security. It is not possible to directly invest in the Lincoln Middle Market Index. Some of the statements above contain opinions based upon certain assumptions regarding the data used to create the Lincoln Middle Market Index, and these opinions and assumptions may prove incorrect. Actual results could vary materially from those implied or expressed in such statements for any reason. The Lincoln Middle Market Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but Lincoln International has not conducted an independent verification of such information. Lincoln International makes no warranty or representation as to the accuracy or completeness of such third-party information.

The post Lincoln International Releases Third Quarter Middle Market Index, Shows Tenth Consecutive Quarter of Enterprise Value Growth appeared first on Lincoln International.

The Lincoln MMI demonstrates that privately held middle market companies are generating returns comparable to major public stock market indices, but with less volatility.

The post Q3 2018 Lincoln MMI Report appeared first on Lincoln International.

EMS Stock Index Q3 Highlight – Small Index has increased 4.6% from last quarter. Read more

The post EMS Stock Index Q3 2018 appeared first on Lincoln International.

Lincoln International, a leading global, mid-market investment bank, is pleased to announce the appointment of David Lee-Seifert as Managing Director in Frankfurt starting November 1st, 2018. David will Co-Head the Industrials Team in German-speaking Europe with particular focus and expertise in the Packaging, Packaging Solutions and Materials sectors.

David has over 14 years of Investment Banking and Corporate Finance transaction experience in the Industrials sector. Prior to joining Lincoln International, David was in the Industrials Team at BNP Paribas in Frankfurt focusing on M&A and ECM projects in the Capital Goods and Packaging sectors for the EMEA region. From 2016, David was primarily responsible for the strategic M&A and ECM dialogue with multinational public and private companies, family-owned businesses and financial sponsors in the Packaging sector. During this time, David has successfully closed M&A transactions with a total deal value of approx. Euro 2 billion. Before BNP Paribas, David was in the Corporate Finance Team for German-Speaking Europe at Société Générale in Frankfurt, as well as at Rothschild and Merrill Lynch in London, where David advised on numerous cross-border M&A and Capital Markets transactions.

The Industrials sector represents a significant priority of the global Industrials teams at Lincoln International. In 2017, Lincoln International was the most active industrials investment bank globally based on number of industrials transactions (MergerMarket). David joins at an increasingly busy time for the firm – the global economy continues to gain momentum, public market (and buyer) performance is sustainably positive, and capital is increasingly available. These factors are all driving a continued thirst for growth. Add those dynamics to a backdrop of policy changes around the world and ongoing technology disruption and the result is an opportune time for global industrial M&A.

The post David Lee-Seifert strengthens Lincoln International as Managing Director in the Industrials Sector appeared first on Lincoln International.

Lincoln’s Distribution Index recorded a gain of 5.2% in Q3 2018 vs. Q2 2018. Read more

The post Distribution Market Update Q3 2018 appeared first on Lincoln International.

Lincoln International is pleased to announce that Siebrecht Declerck joins the firm to spearhead its Belgian mergers & acquisitions (M&A) advisory activities. He will work closely with Eric Wijs, Managing Director & Head of the Benelux, and Lincoln International’s global industry teams to further expand the firm’s presence in Belgium.

With one tightly integrated team of nearly 500 professionals across 20 locations in 15 countries, Lincoln International has become one of the leading mid-market M&A advisors worldwide, combining international reach and deep sector expertise. For the last 5 years, Lincoln International consistently ranks as #1 mid-market sell-side advisor to private equity globally.

Since the creation of the Benelux team in 2010, Lincoln International has grown to become one of the leading mid-market M&A advisors in the region and has built a particular strong track-record of advising on sell-side transactions. Over the last 10 years, Lincoln International has successfully advised on a number of notable cross-border transactions involving Belgian private equity groups and corporates such as Beaulieu International Group, Cobepa, Desotec, Etex, Sioen Industries, Solvay and Straco.

Siebrecht Declerck joins Lincoln International from Rothschild & Co. where he focused on M&A assignments in Belgium for a diversified set of clients including private equity groups (a.o. Compagnie Nationale à Portefeuille, Ergon Capital Partners, Gilde Buy Out Partners, GIMV, SRIW, Verlinvest and Waterland Private Equity), large corporates and public sector clients in a variety of industries. In 2010, Siebrecht was involved in setting up the offices of the independent advisory firm Leonardo & Co. in Brussels (subsequently acquired by Rothschild & Co. in 2016).

Commenting on this appointment Eric Wijs, Managing Director & Head of the Benelux office of Lincoln International, said, “We are very pleased with the development and growth of Lincoln International in the Benelux since the opening of our Amsterdam office in 2010. We look forward to working with Siebrecht and building on the success of our existing team and deep client relationships in the region.”

Siebrecht Declerck commented, “I am excited to join Lincoln International. I firmly believe the combination of Lincoln International’s fully-integrated global platform, strong sector expertise and entrepreneurial culture is a critical differentiator as successful businesses increase their focus on international growth through cross-border M&A.”terdam

The post Lincoln International further strengthens Benelux presence with addition of Siebrecht Declerck to spearhead its Belgian M&A activities appeared first on Lincoln International.

In Q3, the EPC Integrators / Developers Index increased 7.0% from last quarter.

The post Solar Energy Stock Index Q3 2018 appeared first on Lincoln International.

On average in Q3, EBITDA multiples for the subsectors increased 0.4x from the prior quarter and were up 2.7x on a year over year basis.

The post Education Technology & Services Market Update Q3 2018 appeared first on Lincoln International.

Much has been written over the last several months and years about the looming divide between available jobs and the supply of candidates with the requisite skills to fill those jobs. Moreover, many of those jobs are in fields that lead to long-term careers – a path to social and economic upward mobility for many. Over that same time period, we have seen a wide range of proposed solutions to narrow what has generally become known simply as the “Skills Gap.” Identifying approaches to fill this gap remains one of the most daunting challenges facing our country and its education system. This issue, and the market that has developed around it, is a frequent topic of conversation amongst the venture and private equity investors we meet with regularly.

The Community College Dilemma

Federal- and state-level initiatives have ranged from modest funding support for local skills-development programs to sweeping changes to the community college systems across the U.S. Some states have experimented with such extensive changes (namely the “Promise” tuition support programs employed by various states). Most, however, have limited the breadth of those programs or simply remain frozen in grappling with a daunting identity crisis – are community colleges intended to be the bridge between high school and a four-year degree or should they be focused on providing key career and technical education (“CTE”) programs for those not seeking a four-year degree. Or can they be both?

While that question remains unanswered, a series of unique program providers have stepped into the void with the goal of providing critical skills to those students seeking a career path that can provide long-term stability and income to support a family. In the professional trades arena, much of that effort historically was expended by for-profit post-secondary schools. But in the wake of Obama-era regulatory changes, a significant portion of that market was closed or hampered to such an extent that many schools simply closed their doors. However, some have thrived, including many focused on critical needs within the medical, technical and skilled trades. By providing a clear and measurable ROI to their students, these institutions have prevailed not only through regulatory headwinds but also despite the longest-running economic expansion in modern history.

Companies Taking on the Challenge

At the same time, we have witnessed a combination of new market entrants introducing novel and innovative approaches along with decades-old providers that have successfully migrated their business models to meet the needs of 21st century learners. Penn Foster (www.pennfoster.edu; backed by Bain Capital’s Double Impact Fund) is a noteworthy example of a long-standing company navigating the changes in market needs and finding creative ways to partner with communities and students to deliver in-demand skill development for those that need it most. In stark contrast are two newer entrants, Graduation Alliance (www.graduationalliance.com) and Acceleration Academies (www.accelerationacademy.org), that help high school dropouts find paths back into the workforce and are making significant strides in guiding these students back on a path toward long-term career opportunities.

We have also seen entrepreneurial enterprises develop a host of creative solutions spanning the education spectrum. One such provider focuses on leveraging existing resources to provide a unique solution in the coding market. Unlike many of its bootcamp predecessors that have often stumbled amidst bold expansion efforts, Trilogy Education Services (www. trilogyed.com; backed by Highland Capital, Exceed Capital and Macquarie), is partnering with universities to deliver short-term software development bootcamps on their campuses using their facilities. Revature (www.revature.com; backed by University Ventures and Eden Capital) is another skill development provider focused on bridging students across any major/focus area toward a career in software development. uCertify (www.ucertify. com) is another prime example of leveraging technology to reach 21st century learners wherever they are to deliver critical career-enhancing training. Focused primarily on IT professional certifications, uCertify’s programs can be delivered either on the ground with partner universities or online (both live and on demand).

Lincoln Perspective

While the question of how the Skills Gap will ultimately be bridged remains, it seems clear the answer is not a simple one and likely not the same for all students. So long as there is demand, entrepreneurs will continue to create ways to meet that demand in new and interesting ways. We look forward to seeing how things progress both for existing enterprises such as Graduation Alliance, Trilogy, uCertify and others, as well as for those developing new ideas that have not yet been put into action. We applaud the efforts of those plowing new ground today and those who are just embarking on a new approach that will further push the boundaries of what our traditional education systems have supported.

The post Filling the Gap – How Private Enterprise is Tackling the Up-skilling and Re-skilling Challenge appeared first on Lincoln International.

The post Lincoln International Germany awarded “German M&A Financial Advisor of the Year 2018″ by Mergermarket appeared first on Lincoln International.

There was an uptick in M&A activity in Q3 as investors seek to build stronger platforms and scale up to capture revenue growth opportunities.

The post EMS DealReader Q3 2018 appeared first on Lincoln International.

Q3 2018 showed significant, unusually high activity involving corporate carveouts.

The post Food & Beverage DealReader Q3 2018 appeared first on Lincoln International.