Why is Foreign Investment in U.S.-Based Business Growing?

Posted by Carl Doerksen on July 30, 2014 at 8:30 AM

A few months ago The M&A Advisor published a study entitled “The New American Renaissance in Manufacturing.” It was based on a symposium they co-hosted last year with Foley & Lardner LLP, a leading international legal firm with 21 offices in the U.S., Belgium, China, and Japan.

As the title implies, the focus of the meeting and the subsequent publication was on the renewal of U.S. manufacturing during the past several years. Often referred to as “onshoring” or “reshoring,” the facts are clear that manufacturing in the U.S. is experiencing a recovery not seen in years due to a number of factors. And a second reality of this trend is that offshore companies and equity firms are spending money on U.S.-based businesses under the theory that it is more effective to buy than build.

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Topics: u.s. manufacturing, international buyers & investors

Why is Succession Planning Important?

Posted by Carl Doerksen on July 28, 2014 at 8:30 AM

The National Center for the Middle Market (NCMM) recently published an article emphasizing the importance of succession planning. Although it focused on the ongoing continuation of a business via a smooth succession plan, it reminded me how vital it is for business owners to plan for their eventual exit as well as develop a succession plan to meet the needs of the organization.

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Topics: succession planning, exit planning

M&A Activity is Surging Worldwide

Posted by Carl Doerksen on July 25, 2014 at 8:30 AM

A few weeks ago, Dan Primack in one of his “Term Sheet” daily email updates provided this evidence to support the notion that mergers and acquisitions activity is on the rise:

“Global M&A: There was $1.8 trillion of worldwide M&A during the first half of 2014 (including $1.1 trillion in Q2), up 73% over the first half of 2013. Moreover, it was more volume than in any first half since 2007, while the 73% bump is the largest such increase in 1998.”

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Topics: selling a business, m&a activity, buyer activity, exit planning

How Are Data Analytics Impacting Due Diligence?

Posted by Carl Doerksen on July 23, 2014 at 8:30 AM

A few weeks ago the Association for Corporate Growth (ACG) hosted a webinar entitled “Going Beyond Traditional Due Diligence – Using Data Analytics to Gain Unique Deal Insights.” The speakers were Steve Martin and Patrick Gilbert of BKD, a leading accounting and business advisory firm.

The fascinating webinar revealed how professional buyers and their advisors are using data stored on sellers’ MIS (management information systems) to gain knowledge and information that before was either not requested or simply not addressed until after a deal closed. Martin and Gilbert appear to be on the cutting edge of a new kind of forensic due diligence, a due diligence that in their words will often “flesh out information not even known to the seller.”

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Topics: due diligence, data analytics

A Merger of Synergies

Posted by Carl Doerksen on July 21, 2014 at 8:30 AM

Synergy – the term is probably used too much in investment banking circles. I would bet that there are more synergies discussed than actually pan out in the real world. And if you ask a dozen investment bankers to define it, most would come up with the old 2+2= 5 analogy. Synergy is like beauty: tough to define but you know it when you see it.

That’s why I always keep my eyes open for scenarios that are truly synergistic to share with you folks. A merger was recently announced that involved two companies that had been operating as separate portfolio companies for The CapStreet Group, a private equity firm located in Houston that “invests in growing middle market companies in Texas and other Sunbelt states and partners with management to accelerate growth and improve profitability.”

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Topics: mergers, synergies

What is Driving M&A Activity in the Lower Middle-Market?

Posted by Carl Doerksen on July 18, 2014 at 8:30 AM

The International Business Brokers Association (IBBA) and the M&A Source, in partnership with Pepperdine Private Capital Markets Project, conduct a quarterly survey of M&A intermediaries. Entitled “The Market Pulse Report,” the survey gives timely and accurate data regarding trends and issues impacting and affecting the lower middle-market mergers & acquisitions (M&A) industry.

Two hundred fifty respondents from 42 states completed the first quarter 2014 survey. The majority of respondents (54 percent) had at least 10 years of experience in the M&A industry. Participating advisors reported closing 235 transactions in first quarter 2014. The survey revealed several interesting trends, as reported in the Green Bay Press Gazette:

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Topics: middle market, buyer activity

Why is Middle Market M&A Activity Expected to Grow?

Posted by Carl Doerksen on July 16, 2014 at 8:30 AM

This is a question often sent to us by business owners interested in our services. It seems that so many are still under the impression that buyers are still stuck in 2009 and 2010 when acquisition activity plummeted due to the impact of the recession on the financial industry.

The reality is the current environment is better than it has been in years for middle market M&A activity. This assertion was supported by a recent survey by GE Antares Capital.

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Topics: middle market, m&a activity, buyer activity

Key to a Successful Business Sale – Part IV – Get a Professional Evaluation

Posted by Carl Doerksen on July 14, 2014 at 8:30 AM

This is the last in our series of topics relating to some of the key components you need to manage if you are going to find a buyer for your business without professional representation. To recap, our first installment focused on the accuracy of your numbers. Part II examined the importance of doing your research and finding out who is actively acquiring, and the third piece looked at the significance of managing family dynamics during the selling process. Each of these is equally vital to a successful sale and must be managed carefully.

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Keys to a Successful Business Sale – Part III – Family Dynamics

Posted by Carl Doerksen on July 11, 2014 at 8:30 AM

As most of you are aware, this is the third in a series dealing with some key issues that need to be addressed to culminate in a successful sale of your business. Part I looked at the importance of accuracy in your financials. Part II examined the fact that the more research you can do on who is actively buying companies in your industry and more importantly WHY they are buying will allow you to create effective buyer lists.

Today we look at a topic that is far too often not considered pre-sale: family dynamics.

Most business owners who have partners realize how vital (and legally required) it is to have all partners on the same page when it comes to the sale of a business. In reality, even if you are a 100% owner of a company, the dynamics of family relationships play a big role, bigger than most founders consider when they approach buyers.

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Topics: selling a business, exiting your business, succession planning, family dynamics

Keys to a Successful Business Sale – Part II – Identify Active Buyers

Posted by Carl Doerksen on July 9, 2014 at 8:30 AM

This is the second installment in our series that examines the important steps you need to undertake to successfully sell your business. In the first part we stressed realism and accuracy in terms of your base year and projected numbers. We focused on how vital accurate financials are in helping potential buyers believe in your story and have confidence in your future.

Today we look at another important step that too many business owners who enter the market without representation often overlook: doing your research to determine who is active AND understanding how precedent transactions will impact the value of your company. Both of these go hand in hand, and although logic would tell you that these are important, too often the business owner in his haste to close a deal doesn’t do sufficient research in both of these areas.

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Topics: add-on company, selling a business, finding a buyer

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