In past articles we have described one type of deal structure: the partial sale. This deal structure is used primarily by equity firms, and it encourages existing ownership and management to stay with the acquired entity post-acquisition. They are “encouraged” to do this by retaining an equity stake in the company (usually less than 50%). This allows them to participate in the growth and expansion of the company without assuming 100% of the risk going forward. It is also beneficial because typically the equity firm will provide professional management, financial engineering, and marketing/sales talent that the original entity would not have had access to.

Quite often I come across closed deals that really fascinate me. Usually what captures my attention is the strategic planning that goes into synergistic acquisitions. This was clearly the case in Pamplona Capital Management’s recent announcement that it had acquired two companies in very different industries that have one key item in common: quarters.

A few weeks ago I participated in a webinar on the growth in Canadian outbound M&A. Hosted by The Deal, participants included:

I recently came across a new trend that could prove to be very beneficial to quite a few middle-market business owners: There is competition among business buyers, specifically between family offices and traditional equity firms for deals. The term “family offices” may be new to some of you. A family office or single family office (SFO) is a private company that manages investments and trusts for a single wealthy family. The company's financial capital is the family's own wealth, often accumulated over many family generations.

At this point in the year, M&A experts and analysts begin to predict, based on historic norms and recent trends, where M&A activity will likely be at the end of the year. As we discussed in an earlier article, a huge bubble of deals worked their way through the system in late 2012. Most of these deals, especially in the lower middle-market, were moved up into 2012 to avoid cap gains tax increases on January 1. Because of this, deal volume was lighter in the first quarter of 2013.

One of the most satisfying parts of Generational Equity’s business is helping privately held business owners find great matches for their businesses. Not only does this provide them with a liquidity event, it also allows the entrepreneur to ensure that his legacy continues on post-sale. It is this win-win scenario for which our deal teams aim with every engagement.

One of the most important skills that Generational Equity dealmakers bring to every deal is the ability to work with multiple potential buyers during a marketing program. This may sound intuitive to you since, as with most auction processes, having more folks interested only helps the price of the item remain attractive. This is why art, for example, is typically sold via limited auction, and auction houses try to fill the gallery with folks to create a compelling environment for the item being auctioned.

One of the most important steps you will need to take when you sell your company is creating a buyer list for your business. Once you have an idea of what your company is worth in the market today and you have made the often emotional decision to sell your company, the next step is the creation of your buyer list.

A couple of weeks ago USA Today ran an interesting feature article. Entitled, “Few shine as revenue stars; Companies' profits rise on cost-cutting rather than growth,” the focus of the article, as the title implies, was on the fact that although we constantly hear about bottom-line improvements in corporate America, the undiscussed issue is where this profit improvement is coming from.

One of the most enjoyable aspects of my role with Generational Equity (besides creating these articles) is meeting with professional business buyers and getting their input regarding the types of businesses they are looking for and what they expect in our current market environment. We have videotaped a number of these and I thought I would share key points with you since you may find their comments very enlightening.