The Acquisition Trends of U.S. CEOs

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

A lot of questions have been asked this year about the current merger and acquisition (M&A) cycle, and the real issue behind the questions is this: How long will the current sellers market remain in force?

Given that last year was nearly a record year in terms of volume and was a record year in terms of value, business owners that attend our exit planning seminars often wonder, how long will this continue?

The reality is the factors underpinning the market in 2014 are still in force this year. Even with interest rates expected to increase sometime in 2015, they will still be far below historic levels and should not impact deal making that dramatically.

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Topics: corporate strategics, deal activity, selling a business, finding a buyer, acquisitions

Strategic Buyers’ M&A Initiatives in 2015 and Beyond

Posted by Carl Doerksen on March 27, 2015 at 8:30 AM

As much as we talk about private equity playing a key role in middle-market merger and acquisition (M&A) activity, it is important to remember that strategic players are also a key buying group driving activity in this sector. Both groups bring differing strategies and goals to their acquisition programs but they ultimately want the same thing: To find companies in the middle market that are profitable, growing, and “buyer ready.”

Recently Firmex and Mergermarket combined to survey corporate leaders (from now on referred to as strategic buyers) regarding their expectations for M&A activity in U.S. and Canada going forward. Their report, entitled “Mid-Market: The Crux of North American M&A,” is a great examination of how leaders of these strategic players in North America are viewing the M&A environment they face.

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Topics: corporate strategics, m&a activity, sellers market

What to Expect During the Process of Selling Your Company

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

I was recently traveling to visit a client with one of our more experienced dealmakers, and while trapped in an airport due to bad weather and growing tired of hearing about his exceptional children, I asked him to give me some ideas I could share with our blog readers about what to expect once they have made the decision to go to market.

His answer was simple and straight to the point:

No matter how prepared you are, expect something (and sometimes everything) to go wrong at least once along the way.

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Topics: selling a business, family dynamics

M&A Advisors and Wealth Managers – Key to A Successful and Fruitful Exit

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

One of the most important issues facing business owners in America today is related to timing, and not just timing in general but exit strategy timing. We have discussed the importance of creating a succession plan many times. The fact is that far too many business owners simply delay the inevitable and do not develop a team to replace themselves until it becomes obvious that buyers could be concerned.

In fact, one of the reasons that some of our clients enter our value enhancement program post-evaluation is that they realize in order to obtain an optimal value for their companies, they need to work on developing a cadre, a team, a group of mid-level managers that are ready to support the company if the owner were to exit.

An interesting study was release recently by CliftonLarsonAllen's (CLA) that looked at this issue.

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Topics: u.s. manufacturing, exiting your business, selling your business, exit planning

Business Owners Voice Concerns for 2015

Posted by Carl Doerksen on March 20, 2015 at 8:30 AM

I always find business owner surveys that highlight their concerns of tremendous interest. What a great way to determine how entrepreneurs are planning their futures based on their macro and micro business concerns.

So when Axial released its Middle Market Monday 2015 survey a few weeks ago, I read it with great curiosity (Axial is a leading B2B website that combines business owners with capital providers/intermediaries). More than 100 business owners participated in the survey and the results told me two things: They are facing growing pains in terms of people and capital, and to overcome these issues they are looking outside via acquisitions to fill the gaps.

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Topics: middle market, partial sale, growing a business

2015 M&A Deal Flow Predictions

Posted by Carl Doerksen on March 18, 2015 at 8:30 AM

As we have examined in past articles, a great indicator of future merger and acquisition activity can be found in the number of deals being currently launched. Although very few (if any) M&A advisory firms publicize this data, one of the leading virtual data room providers, Intralinks, on a quarterly basis amalgamates and sanitizes their virtual data room (VDR) activity and use this as a predictor of future deal announcements and closings.

The Intralinks Deal Flow Predictor (DFP) has been independently verified as an accurate indicator of future changes in the number of announced global M&A transactions, according to Intralinks. Quarter-over-quarter (QoQ) percentage changes in the Intralinks DFP typically are reflected (on average) six months later in announced deal volumes, as reported by Thomson Reuters.

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Topics: selling a business, m&a activity, selling your business, sellers market, buyer activity

Private Equity – A Record Transactional Year in 2014 and More of the Same in 2015

Posted by Carl Doerksen on March 16, 2015 at 8:30 AM

Now that the data is in, we know that 2014 was one of the strongest years in private equity M&A activity in quite some time. In fact, according to PitchBook:

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Topics: middle market, m&a activity, private equity firms, sellers market

What Are The Benefits of Using an M&A Advisor?

Posted by Carl Doerksen on March 13, 2015 at 8:30 AM

A few weeks ago, Billy Fink, the editor of the Axial Forum, a blog created by the good folks at Axial (Axial is a B2B website that connects capital providers with business owners) wrote a very interesting piece entitled “M&A Advisors Proven to Improve Valuations.” It was based on an academic study that analyzed “a sample of 4,468 acquisitions of private sellers during the period of 1980 – 2012 to examine the decision and the consequences of hiring sell-side M&A advisors.”

What they found was no surprise to those of us that have been in the industry for a number of years:

“Private sellers receive significantly higher acquisition premiums when they retain M&A advisors.” Although “top-tier” intermediaries offered the highest acquisition premium, the benefit of the M&A advisor held true across all deal sizes.

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Topics: limited auction, selling a business, selling your business

Getting More For Your Company By Identifying Its Intangible Assets

Posted by Carl Doerksen on March 11, 2015 at 8:30 AM

When you approach buyers with the opportunity to acquire your business, you need to be clear about what your company’s value proposition is to a specific buyer. What features does your business have that would add value beyond the pure number-driven ecoomic value of your company? But before you can determine what these features are, we need to define “intangible assets.”

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Topics: thinking like a buyer, intangible assets, selling a business, selling your business

M&A Activity Predictions for 2015

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

The title of the article in Mergers and Acquisitions magazine summed up Generational Equity’s experience in 2014 as well:

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Topics: selling a business, m&a activity, selling your business, sellers market

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