Spotlight 2011: Mid-market stays robust

Deal flow picked up in 2010 and ‘momentum’ is carrying into 2011 for firms to find attractive deals, says Gary Crittenden, managing director at Huntsman Gay.

The mid-market deal environment will be robust in 2011, with lenders continuing to finance private equity transactions, and pricing hovering at reasonable levels, according to Gary Crittenden, a managing director at Huntsman Gay Global Capital.

“We feel good about next year,” Crittenden said. Factors like the US government’s efforts to strengthen the economy led to an improved deal environment in 2010. Those factors will likely contribute to a robust market in 2011 as well, he said.

“The economic backdrop next year is good. Public equities won’t progress very rapidly but the private markets have good economic underpinnings to support another year of attractive multiples and good financing,” Crittenden said. “[It won’t be] an overheated market but it will be another good year next year.”

Gary
Crittenden

Financing deals is much less difficult than in 2009, and the debt markets should stay healthy into 2011, he said. “Multiple parties are interested in what we’re doing, across various size ranges,” Crittenden said about finding lenders for deals.

Adding to the friendly deal environment, limited partners have expressed appetite for co-investment opportunities, Crittenden said.

As 2010 fades into history, the momentum is there for some quality opportunities in 2011, Crittenden said.
“By tone I mean, the combination of pricing and the debt markets. Pricing accelerated as you went into the third and fourth quarter, and it happened with funding being widely available,” he said. “We’re still at a level where attractive deals can be done at return levels that can be appropriate for the investor base we work with.”