Selling a business when the owner is ready.

Sellers do not control timing, the BUYER and the MARKET determine timing

• Selling a business and achieving liquidity is likely to be the single most important financial event for a private business owner. Market timing is perhaps the most critical factor to securing maximum value in the sale of a business.
• While numerous factors may drive a seller to seek immediate liquidity in their business, unfortunately, the needs of the buyer and the conditions of the market ultimately dictate timing and value.
• Selling a business when the owner is ready most often leads to eroded value. Achieving maximum value for a business requires the owner to be mentally and emotionally prepared, be "deal-ready," proactively monitor the M&A markets and move with urgency at the proper time.

Determinants of MARKET timing

• Market timing is critical when evaluating the right time for selling a business. The economic climate, interest rates and the tax and regulatory environment all impact market timing.
• Interest rates are currently at their lowest levels in over fifty years, reducing required rates of return on investment ("ROI") for optimal buyers of companies. Lower required ROIs allow optimal buyers to pay more for acquisitions than ever before.
• Low long-term capital gains tax rates are allowing sellers to retain more value than ever before. Currently, a seller can enjoy a 15% long-term capital gains tax rate (the lowest in history). However, these rates will be phased up to 20% over the next five years.

Determinants of BUYER timing

• Public company's strategic buyers are pressured by Wall Street to meet revenue growth and earnings expectations. These buyers therefore actively monitor buying opportunities in order to rapidly improve upon limitations or weaknesses in their businesses. Strategic buyers purchase companies to increase market share, expand geographically, acquire new products and gain competitive advantages.
• Favorable accounting treatment for European buyers ending in 2005 has spurred cross-border M&A, driving up values for businesses and forcing US buyers to match European offers in order to compete effectively.

Generational Equity understands the importance of market timing

• The Generational Equity team has decades of collective experience selling private companies and are experts at evaluating and understanding timing, including both market timing and buyer timing issues. We can show you how to use both the timing of strategic buyers and market timing to your advantage.