I have more from Shailen Chande who attended the CVCA conference. Here is what Shailen has to say about Valuation & Structuring transactions:
- Valuation of Canadian PE deals never reached the heights of their US counterparts - many Canadian sponsors sat on the bench and leverage levels were relatively prudent.
- For the most part, there is not widespread acceptance of the "new world" amongst sellers - deals getting done are when sellers are distressed.
- Lack of transaction comps post Fall 2007, significantly deteriorating current trading and lack of visibility through 2009 make valuation incredibly difficult - greater emphasis on diligence.
- To mitigate valuation concerns, recent transactions have seen a greater emphasis on earn outs and vendor take backs - trend will likely continue.
- Most interesting opportunities have a restructuring angle - need to structure for the downside case.
By the way, you can reach Shailen at Shailen Chande at hotmail.com.