We are seeing a lot of this in Europe at the moment.
With 10 year sovereign bond yields hoovering around 1-2%, companies are loading up medium-term debts (5-7 years) at less than 1% to do acquisitions; hence, almost anything they can buy these days will be immediate EPS-accretive. Private-market deals are now happening at double-digit EV/EBITDA multiples, especially with assets that have bond-like characteristics, like infrastructures, utilities.
Most recently, Vinci (DG FP) - the largest infrastructure operator in Europe, has talked about buying Aeroport de Paris (ADP FP), at almost 18x EV/EBITDA.
We are having an internal debate on this. These deals, by traditional metrics, are super expensive, but they also boost EPS immediately, thanks to the simple interest rate arbitrage.
It would be great to hear your thought on this.