As we have discussed in past posts, the M&A cycle we are currently in is clearly a “sellers market,” meaning that buyers are active, competing against each other for solid deals, and valuations are rising. Gilberto Pozzi, Co-Head of Global Mergers and Acquisitions, Investment Banking Division with Goldman Sachs, confirmed this scenario recently. Mr. Pozzi was interviewed about current trends in worldwide M&A.
DealForce.com is a powerful innovative tool for buyers searching acquisition opportunities in the lower-middle market. Synced via SalesForce, the DealForce website gives buyers a real-time look into Generational Equity’s portfolio of deals in the market. All acquisitions featured on the website are exclusive to Generational Equity and can be viewed via free registration.
I am always on the prowl for leading economic indicators because they can be telling about our economy’s future. So the title, “Why Railroads Can’t Keep Enough Boxcars in Service,” of The Wall Street Journal article a few weeks ago caught my attention.
In October Generational Equity re-introduces its services to business owners in the United Kingdom. We will be holding a series of exit planning workshops that are based upon our North American symposiums but will contain content that is relevant to business owners in the United Kingdom. We are very excited to be re-entering this market because based on our research, the U.K. is one of the favorite markets for U.S.-based business acquirers.
In fact, according to PitchBook (a research firm focusing on alternative sources of funding), historically the U.K. has been a favorite destination of U.S.-based buyers for quite some time.
The article in Wealth Management summed the dilemma up accurately:
There are some 12 million baby boomers who own a business, and 70 percent of them will be retiring over the next couple decades. Estimates of the total wealth locked up in these companies run in the trillions of dollars.
Written from the viewpoint of a wealth manager, this is a literal goldmine. However, viewed through the prism of a business owner, this is a huge and sticky quagmire. One of the major issues we are now focusing on in our M&A seminars is the pending impact of the baby boomer business owner retirement “tsunami.” This term was first used by researchers with the Pew Research Center to describe the impact of the waves of baby boomers retiring throughout the next 15 years or so.
Throughout the years we have talked quite a bit about private equity (PE) firms – how they operate, what they focus on, and how they can add tremendous value to their holdings by providing not only capital but managerial talent, financial strategies, and marketing/sales muscle. But what we haven’t analyzed is how all these features are actually driving firms’ growth and expansion.
A recent article on PitchBook, a leading research organization focusing on alternative investment sources, caught my attention. Because for the first time, it became clear that for sellers looking for full or partial investors, now is the best time in our history to find them. There are more PE firms looking for deals than ever before.
Recently the Federal Reserve released very positive news regarding the U.S. economy. Based on their analysis, it appears that household wealth is at an all-time high, as reported by Reuters:
Recently Hammond, Kennedy, Whitney & Company, Inc. (HKW) announced the sale of one of its holdings, Crane Rental Corporation (CRC), based in Orlando, FL. CRC is one of the largest and most prominent crane rental, hauling, and rigging companies in the United States. CRC had been a portfolio company of HKW since 2008, and Maxim Crane Works, a portfolio company of Platinum Equity, bought the crane company.
Recently the question that has been raised is this: Just how long will the current “sellers market” continue? As you know, a number of forces are coalescing now to create one of the strongest M&A cycles in recent memory. As you can see below, since the end of the last recession, M&A activity has been quite strong:
In Part I of our Canadian private equity (PE) update we examined overall deal flow for the past several years, as well as the phenomenon of the popularity of add-ons for PE targets. As you’ll recall we found that deal volume is up dramatically in Canada since the end of the recession AND that more and more professional buyers are pursuing a strategy of bolt-ons to existing targets.
Today we look at additional Canadian PE info relating to key components of activity:
- Location of the buyers
- Size of the deals