How do multiples differ in 'hot' vs. 'cold' M&A markets?

Hot-market effects (e.g. 2021 post-COVID liquidity, 2007 pre-GFC):

• Multiples 30–50% above the long-run average.
• Strategic-premium inflation (FOMO).
• PE valuations shaped by a cheap-debt market.
• High auction intensity. Cold markets (2008–2009, the 2022–2023 tech reset): (1) multiples 30% below the long-run average. (2) little auction activity, buy-side dominance. (3) distressed deals dominate the universe. Consequence for precedent valuation: a vintage effect — if 60% of your universe comes from the hot 2021 market, the multiples are inflated. Adjustment: a 12-month rolling median instead of the universe mean; or a vintage weighting.