West Monroe shares its perspective on the M&A spike in the Southern US
Cyber security companies continue to attract interest with many companies being acquired within a few years after start-up.

M&A activity in the Southern US in the first half of 2015 showed no signs of fall off from the prior year, according to five industry sources.

“Usually there is a drop in the number of transactions from 4Q to 1Q, as tax-driven deals cause a flurry of year-end closings, but this was not the case in 2015,” according to Frank Williamson, managing partner of FourBridges Capital.

Deal activity in the Southern States was up by approximately 25% in 1H15, said Brooks Crankshaw, CEO of Highland Ridge Capital. “In many cases, valuations and multiples are more reasonable in the South due to lower cost of living and lower real estate prices. This attracts many out-of-state investors who are being priced out of their own markets,” explained Crankshaw, who said EBITDA multiples were approximately 7.3x in the South, versus approximately 10.5x in the US generally.

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