Q3 2022: How did the Swiss valuation parameters and the European M&A volume develop?

Valuation Market Essentials Switzerland - what key highlights did we observe in Q3 2022?

In brief

• Pertaining to increasing inflation, the spot rates of the USD, EUR and CHF 10-year government bonds increased significantly reaching 3.8%, 2.1% and 1.2% respectively as of the end of Q3 2022 which is the highest level over the past five years for all three rates.
• The EBITDA trading multiples (median values) for the sectors E&U, IG&S and MT&T broke their historical trend and increased during Q3 2022. The other three sectors continued their declining trend.
• The Debt to Capital ratio increased for all sectors as compared to Q2 2022 except for E&U.
• The total number of transactions in the European M&A market decreased by 19% to 171 in Q3 2022 as compared to 210 in the previous quarter.
• During Q3 2022, the average deal volume decreased to USD 353m, which is 63% lower than in the previous quarter but still higher than in Q1 2022.

In times of economic turbulences, we deem monitoring the developments of the most recent market data to be crucial to understand their impact on the key parameters used in corporate valuations. In our quarterly publication Valuation – Market Essentials Switzerland we present the key highlights of the most recent market developments. The publication covers market multiples and cost of capital components per sector for the companies of the Swiss All Share Index (except general financial and real estate companies) as well as relevant macro-economic data used in business valuations.