Minecraft and an M&A Bubble?

My current Forbes column discusses Microsoft’s rumored decision to buy Minecraft developer Mojang for $2.5 billion.  Apparently someone at Microsoft really likes Minecraft and is willing to pay anything to play it on a Windows phone.

While the deal is interesting, the real point is that the M&A landscape is truly frothy, even in the middle market.  Seeking Alpha posted a great article last week highlighting some notable deal statistics, including debt multiples and EBITDA multiple trends.

Overall, prices and leverage are higher now than in the pre-bust peak of 2007.

EBITDA multiples

Debt multiples

 

The good news is that it appears to be a great time to be a seller in the middle market.  But, while it appears that we all have really short memories, we have seen these levels of pricing and debt before, and they didn’t end well.

So, take a deep breath, build something awesome with Minecraft, and spend some time planning your company’s future.

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