Recently, the National Center for the Middle Market conducted a survey on factors currently driving middle market M&A activity. They surveyed 400 strategic decision makers from middle market companies that either “completed an acquisition or sale in the past three years” or “are highly likely to sell a company or part of a company in the next three years.”
The Center designed the survey to understand attitudes and perceptions related to M&A, evaluate the importance of acquisitions and sales to middle market companies, identify drivers of M&A activity in the middle market, and gain insight into the obstacles and challenges involved in deal-making pre-, during, and post-transaction.
As with all their research, the analysis of the respondents provides clear insights into factors driving middle market M&A activity today, factors that could influence an M&A strategy for your business.
It is a plan outlining your corporate development efforts, utilizing mergers and acquisitions to benefit you and your business. This could be securing investment for company growth, or exiting the business for the optimal value. Outcomes might differ, but an exit strategy should exist nonetheless.
As most of our readers are owners of middle market companies, I thought I would share some of the key points from NCMM’s survey here with you:
Of all their findings, I think the last two paragraphs are probably the most important to consider, especially if you own a middle market business today. If you haven’t thought about your M&A strategy at this point, it’s time to think again.
This cannot be stressed enough: You need to get started today if you want to exit in the next 9-14 months, and tomorrow if you are looking at an exit 2-3 years from now or farther. In reality, you should have a relationship started with an M&A advisory firm as early as possible in order to maximize your results.
Because quite frankly few privately held businesses are “buyer ready” the instant the owner(s) decides to sell. This is one of the most important services we offer our clients; we help them to see their companies as buyers will in a detailed M&A strategy.
In fact, our due diligence checklist, which is part of our Roadmap for Enhancing Value, is probably one of the most important documents we prepare for each client. It allows the business owner to determine the steps he or she needs to take in order to optimize their valuations in the marketplace.
Few that are selling a business realize the importance of this until they are deep into due diligence with a buyer who begins to raise concerns about common issues, such as:
These are just some of the roadblocks that an effective M&A strategy will help you navigate on the path to a successful exit from your company.
What often happens when these issues come to light? Two things typically. First, the valuation of your business is often lowered and/or secondly, contingencies such as earn-outs are attached to the transaction.
In many cases, deals completely fall apart because sellers have not created buyer ready businesses and the risk becomes too great for a buyer to move forward.
To ensure that this does not happen to you, be wise and hire an experienced M&A advisory firm like Generational Equity to guide you through the process. With ample time available to you prior to your exit, you can truly enhance the company’s salability.
If you are ready to start creating your M&A strategy, take the first step by attending an executive conference. Our experienced M&A advisors provide a unique, in-depth insight into M&A activity and the keys to building a buyer ready business.
Want to learn more? Use the following links:
And special thanks to the National Center for the Middle Market for conducting this survey and for providing some great analysis of the results. If you would like to review the report yourself, use the following link: Middle Market M&A: What Executives and Advisors Need to Know to Make the Most of Mergers & Acquisitions.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
The information we learn from customers helps us personalize and continually improve your experience at gencm.com. Here are the types of information we gather.
Information You Give Us: We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice. Our computer system protects personal information using advanced firewall technology.
Information from Other Sources: For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Capital Markets LLC may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Capital Markets, L.L.C. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Capital Markets LLC at is office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
INFORMATION ON THIS WEB SITE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Capital Markets may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Capital Markets does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Capital Markets will be deemed NOT to be confidential. By sending Generational Capital Markets any information or material, you grant Generational Capital Markets an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Capital Markets is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Information Generational Capital Markets publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Capital Markets intends to announce such products, programs or services in your country. Consult a Generational Capital Markets representative for information regarding the products, programs and services which may be available to you.
Generational Capital Markets makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Capital Markets web site, please understand that it is independent from Generational Capital Markets, and that Generational Capital Markets has no control over the content on that web site. In addition, a link to a non-Generational Capital Markets web site does not mean that Generational Capital Markets endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Capital Markets BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Capital Markets.
Honored to win Investment Banking Firm of the Year 2 years running.
Over 50 awards and counting.
Sign up to receive regular email updates, industry-leading insights and details on complimentary M&A executive conferences in your area from our award-winning team
Success, you have been added to our list.