How do interest rates affect private equity deal pricing and leverage? This Omnigence report compares large-cap buyouts with lower middle market transactions across rate cycles. It finds that lower middle market entry multiples and leverage have historically moved within narrower ranges. When measured against the 10-year Treasury yield with a time lag, both markets respond, but lower middle market leverage moves at about half the rate of large-cap leverage. The report also examines 18 Arvore Partners transactions, which averaged 5.6x EBITDA in entry multiples. These historical findings describe observed relationships and are not forecasts.
