A few weeks ago, according to the online magazine CFO Dive, and a survey by consulting firm BDO, most middle market CFOs weren't too worried about an economic downturn this year, and instead were preparing to focus on growth. Fewer than 20% of CFOs thought the economy would tip into recession, and only 11% had made preparation a top concern.
Note: This survey was conducted before the fear of a coronavirus pandemic was raised. However, the underlying issues driving M&A will not change and, in fact, may become even more paramount as time passes. Read on for more information.
Most importantly, 25% of those surveyed indicated that growth via M&A is planned in 2020.
That is a significant statistic indeed. Based on 700 middle market CFOs surveyed, a sizable portion are planning to grow in 2020 via acquisitions. This should play a substantial role in the continuation of our current seller’s market that we have been in for several years.
What I found most interesting is that one of the main concerns that CFOs had related to personnel matters. And what is really telling is how these personnel issues can be solved by a strategic focus on mergers and acquisitions. Here is how the article summarizes the findings:
CFOs are trying to find ways to address one of their most pressing concerns: hiring and retaining talent. In fact, the BDO survey finds workforce issues are the number two priority this year, behind only digital transformation. It broke out these workforce issues in six categories, ranked by how much CFOs expect to focus on them:
Each of the items I have bolded above can be significantly improved upon by a strategic acquisition program. You may not even be aware of it, but one of the most important intangible assets that acquirers are looking for is people. Especially talented, experienced professionals.
When was the last time you took a good look at your organizational chart? Have you ever done a skills analysis of your key players? And I am not just talking about your executive staff – I am referring to Larry who has been working in your shop for 25 years and has a wealth of experience and talent that many buyers will find attractive.
You might be sitting on a personnel gold mine and not even be aware of it!
One of the most important areas we cover with our clients during the evaluation phase of our process is the examination of “key” employees. The purpose of this is to determine if the client has some built-in intangible value in his/her associate pool. More often than not they do (and often without really considering it).
To accurately view the value of your employees you must begin thinking like a buyer. A buyer (a CFO for example) who is often troubled by a shortage of skilled workers, the difficulty in training and developing associates, and the huge challenge of attracting talent when unemployment is so low. What are they looking for in acquisition targets? Could your company be one of them?
So bottom-line: A good percentage of CFOs surveyed by BDO are planning to use acquisitions to address growth in 2020. And HR concerns are paramount to CFOs right now; the smart ones will use an aggressive M&A program to address shortages in talent.
Do you want to take advantage of this trend in 2020 and beyond? Since it appears that recession fears are now growing, we can assume the seller’s market will not continue forever. So it is vital the business owners act now on their exit plans.
If you are interested in learning if buyers will pay a premium for your business, you should contact us for an invitation to attend a complimentary Generational exit planning meeting. To learn more, call us at 972-232-1121, or visit our website and provide us with your contact info, or find a meeting near you.
And special thanks to BDO for conducting such a thorough and thought-provoking CFO survey!
Note: As mentioned, this survey was conducted before the fear of a coronavirus pandemic was raised. However, the underlying desire to find talent does not change and acquisitions are a good way to address this need.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2020 Generational Equity, LLC All Rights Reserved
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
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.
Generational Equity, LLC’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Equity Canada to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Equity Canada is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
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 Group 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 Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its 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 may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group 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 Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group 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 Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group 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 Group 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 Group.
Honored to win Investment Banking Firm of the Year 3 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.