There is a clear relationship between the transaction size and the EV/EBITDA multiple used to price the investment.

Higher priced transactions tend to take place at the larger end of the spectrum, in this case in the category of companies with Enterprise Value greater than USD 250m.

At an Enterprise Value of less than USD 250m, there is very little differentiation between the multiples of medium sized transactions and small transactions. The median multiple within both size buckets is around 6x. However, on the upper end of the spectrum, the very large transactions are attracting EV/EBITDA multiples of over 8x.

The size of investee companies is largely determined by the Fund’s investment approach. Funds may take a cautious approach by investing in later-stage companies with stable and sustainable cash flows, particularly during uncertain economic times, typically found in larger companies with entrenched market positions.

Investee companies that do have debt on their balance sheets have a relatively low median Debt: Equity level. The debt level
remains flat and low, well below 1.8x Debt/EBITDA, at all company sizes. Compared to a global context, global Debt/EBITDA steadily increases the larger the company.

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