M&A may be back, but multiples are not: Tilton

Traders gather on the floor of the New York Stock Exchange September 24, 2009.

NEW YORK (Reuters) - While corporate mergers and acquisitions are starting to return from a long hiatus, the earnings multiples that private equity investors would hope to get on the deals are not, turnaround investor Lynn Tilton said on Tuesday.

"I don't think multiples are where I'd like them to be," Tilton, chief executive of distressed investment firm Patriarch Partners, said at the Reuters Restructuring Summit in New York.

Tilton, whose fund oversees $6 billion in assets, said she would rather be a buyer than a seller in the current market and planned to wait out the cycle.

"I'm looking at more deals than I've ever looked at," she said, saying that Patriarch, which specializes in buying companies on the verge of liquidation, is examining three or four acquisitions right now. Tilton said she recently made a trip to Minnesota to look at a small boat manufacturing company.

However, Tilton said the investment time frame for distressed companies will be more like three to five years rather than one or two, because there are few signs the economy will be able to recover quickly from the recession.

"You have to assume that you're going to wait longer," Tilton said, noting that the time frame affects the purchase prices for distressed deals.

"I just don't see the rapid recovery, but if I'm wrong that would be a good thing," she added.

Tilton's Patriarch Partners has recently invested in steel, wood pulp and several consumer product companies, like Stila cosmetics and the Spiegel online apparel retailer.

(For summit blog: blogs.reuters.com/summits/)

(Reporting by Emily Chasan and Tom Hals, editing by Matthew Lewis)