The Importance of Clean Financials to Business Buyers

Posted by Carl Doerksen on October 12, 2015 at 8:30 AM

A few weeks ago I polled our dealmakers to determine the most frequent issues they encounter that cause deals to derail or slow due diligence down dramatically. It was interesting to see the commonalities in their replies. The most common issues include:

  • Poor financial reporting systems
  • Excessive owner dependence
  • Significant customer concentration
  • Lack of recurring revenue streams

Throughout the next few weeks we will cover the significance of each of these individually. The good news is that with good planning and effective implementation, each of these can be mitigated and significantly improved.

And the really good news is that the first one on the list, and the topic we will cover today, is perhaps the quickest and most effective fix of all.

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Topics: due diligence, selling a business

Tom Farrell To Facilitate Group Discussion At ACG EuroGrowth

Posted by Carl Doerksen on October 9, 2015 at 8:30 AM

The Association for Corporate Growth invited Tom Farrell, executive vice president of Generational Equity, to moderate an executive roundtable at their annual meeting in Amsterdam on November 16, 2015. This is quite an honor and recognizes the leadership role that Mr. Farrell and Generational Equity both play in the M&A industry.

The roundtable Farrell will be leading is entitled “Best Practices in Deal Origination.” Mr. Farrell was chosen to lead this conversation because of his extensive experience in developing exit planning and deal making strategies for business owners and buyers. Farrell has a comprehensive background spanning more than 40 years in strategic business development, executive management, and business ownership.

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Topics: generational equity, europe

Why Succession Planning is Important

Posted by Carl Doerksen on October 7, 2015 at 8:30 AM

It is fascinating to see the business media begin to focus more attention on our aging baby boomer business owners. A few years ago I saw 1-2 articles a quarter on this issue; now nearly every month 3-4 publications are weighing in on this topic because it is potentially one of the most troubling issues facing our economy during the next 10-15 years.

Some experts are calling this a “baby boomer retirement tsunami,” predicting that at the latter half of this time frame, there will a glut of baby boomer owned businesses hitting the market, far surpassing the pool of available buyers. We have published a number of articles about this over the years as well.

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Topics: baby boomer business owners, selling a business, selling your business, succession planning, exit planning

Reputation Management – A Necessary Step To Be Buyer Ready

Posted by Carl Doerksen on October 5, 2015 at 8:30 AM

As many of you are probably aware, one of the many new industries that the Internet has spawned is reputation management. Although a company’s reputation in the community and industry has always been important, it is only in the last 5-10 years that we all have become painfully aware of what disgruntled ex-employees, competitors, or jilted clients can do to a company’s reputation via online rants.

The reality is that at least in the U.S., you can literally say just about anything you want about a company without any retribution. A person can post anonymous tirades, complaints, half-truths, and outright lies, and there is little you can do about it. Sadly, even if you are able to rebutt a posting on some site, the fact is, the Internet being what it is, the original post can last forever.

Because of this, especially if you are considering the eventual sale of your company, it is vital that you track and stay on top of any mention that appears relating to your company.

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Topics: due diligence, becoming buyer ready

Good News for U.K.-Based Business Owners

Posted by Carl Doerksen on October 2, 2015 at 8:30 AM

I have excellent news if you own a U.K.-based privately held company: Generational Equity is introducing its services to your market! So the significant experiences that our dealmakers have will be brought to bear upon the United Kingdom market starting mid-October.

You might ask: Why is Generational Equity making a significant investment in the U.K. at this time?

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Topics: exiting your business, united kingdom, europe

Merger and Acquisition Activity Remains Strong, Says FactSet Mergerstat

Posted by Carl Doerksen on September 30, 2015 at 8:30 AM

The volume and value of deals closed so far this year is outpacing 2014 by a good margin, according to data released recently by FactSet Mergerstat. As you can see in the following graph, the trajectory of deal closings had its best two contiguous months in June and July of this year in quite some time

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Topics: sellers market, Exit Strategy, exit planning

Baby Boomers Are Ready To Sell – Will There Be Enough Buyers?

Posted by Carl Doerksen on September 28, 2015 at 8:30 AM

Throughout the years we have examined the baby boomer business owner retirement issue in several blog posts:

Even though the sources and numbers vary, the gist of all of these is essentially the same: During the next decade-plus, a significant number of baby boomer business owners will be retiring. The 900-pound gorilla in the room is what will they be doing with all the businesses that they own?

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Topics: baby boomer business owners, sellers market, exit planning

Mergers and Acquisitions – What 2015 May Hold

Posted by Carl Doerksen on September 25, 2015 at 8:30 AM

According to the headline of a recent article in The Wall Street Journal, mergers and acquisitions deal activity is on pace for a record year. In fact, according to data from Dealogic, the total value of M&A transactions this year should reach $4.6 trillion if the record rate continues, eclipsing the old record set in 2007.

What strikes me about the data is the YTD number, which is significantly ahead of every year since 2007.

Some business owners may look at the same data and scoff, saying, “This only reflects billion-dollar deals, not the real world where my business resides.” However, the reality is, as we have examined several times in past posts, lower middle-market transactions (those valued below $100 million) make up the lion’s share of actual deal count. If this is news to you, and you own a company in this range, then you need to spend some time at a Generational Equity M&A conference.

Two questions arise whenever we talk about the current seller’s market:

  1. Why is this a good time to sell?
  2. How long will this market last?
Let's address these.
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Topics: m&a activity, sellers market

Stable Middle-Market Growth Predicted

Posted by Carl Doerksen on September 23, 2015 at 8:30 AM

On a quarterly basis, the National Center for the Middle Market (NCMM) conducts a business performance and economic outlook survey of 1,000 C-level executives of companies with revenue between $10 million and $1 billion. This is the segment that the NCMM defines as being the “middle market” for their research purposes. Their quarterly surveys are quite informative and illustrate the health of this key segment of our economy.

Here are some interesting trends found in last quarter’s survey:

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Topics: middle market, exiting your business, selling your business, sellers market

What Do I Do Once I Sell My Business? 

Posted by Carl Doerksen on September 21, 2015 at 8:30 AM

The simple answer to that question is this: whatever you want! Pull out your bucket list, re-prioritize it, and now that you are liquid, having monetized your biggest asset, go and enjoy life!

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Topics: selling a business, selling your business, exit planning

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