Worldwide M&A total deal value is up 80 percent in the third quarter, compared with the second quarter. The quarter delivered 10,893 transactions, valued at just over $1 trillion, making it the strongest quarter-to-date for global deal making since the second quarter of 2019. (Note: Data is through the end of Sept. 28).
Now for those of you keeping score at home, Refinitiv (which is part of the old Thomson Reuters) is the leading M&A deal research firm in the world. Their track record of tracking deal counts is exceptional. When they say the 3rd quarter was substantial, they are very accurate!
You can see their data graphically in the chart below:
(Source: Refinitiv via middlemarket.com)
“In the face of the global Covid-19 pandemic and economic lockdown, for just the eleventh time over the past 40 years, quarterly merger activity has surpassed $1 trillion during the third quarter of 2020,” says, Matt Toole, Director of Deals Intelligence, Refinitiv.
Deal making activity in September was strong. The value of global M&A announced during September 2020 is $390.7 billion, 73 percent more than the previous September and the highest September total since Refinitv’s records began in the 1970s.
Now that is some good news we can all use! But especially if you are the owner of a privately held company today.
So those of you that have put your exit plans on hold, beware – you may miss out on one of the strongest M&A markets in years. And our internal data concurs with Refinitiv: The third quarter was our strongest quarter ever in terms of deals closed and with our NDA (non-disclosure agreements) requests up 44% so far this year, we anticipate buyer demand to remain strong for months and months.
So where are you in your exit plans? On hold? Waiting for good news? Hoping for the “right” election outcome? These things come and go. Your exit plans should not.
History shows us that most business owners sadly follow the “herd” mentality. Everyone decides to exit when everyone else is exiting. Don’t wait for that! This is especially true as we enter the baby-boomer business owner exit Tsunami.
60 percent of the 15 million privately held businesses in the U.S. are owned by business owners born before 1964…
If you are a baby boomer business owner, let that statistic sink in for a moment.
60% of 15 million is 9 million. Eventually, all 9 million businesses will need to transition to new ownership as their baby boomer owners retire and move on. For the sake of our discussion, let’s assume that 50% of these 9 million either close the business, sell to their employees, or pass the company on to their children.
That leaves a staggering 4.5 million that will need to transition to new owners via an M&A event over the next 15 years or so. Again, keeping the math easy, that is roughly 300,000 that will need to find buyers per year.
How does that sound to you? Well, the key information you are lacking is the number of businesses sold annually now in the U.S. According to Dealogic, between 2007 and 2016 (ten years’ worth of data), 100,373 M&A deals were announced in the U.S., or about 10K annually.
Even if you are bad at math, that means over the next 15 years we will have an overwhelming increase in the number of baby boomer business owners in the market looking for buyers AT THE SAME TIME, far surpassing the number of deals completed right now.
Clearly waiting is not the answer!
Since the 3rd Quarter of 2020 was a record timeframe, why wait? I would suggest that you take advantage of hungry buyers now and see if we can locate one for your business. Don’t just take my word for it, listen to a few of our clients that we have helped move on to the next phase of their lives:
You know that knowledge is power. So, the more you learn about preparing, growing and developing a business in order to make it “buyer ready”, the better off you will be financially (and mentally and emotionally) over the long term.
A great place to start your education is by attending a Generational growth and exit planning executive conference. While there you will learn about strategic and tactical plans you can implement today to better position your business for a buyer. To learn more about our services and our conference, please use these links:
Carl Doerksen is the Director of Corporate Development at Generational Equity.
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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
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
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
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.
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 quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
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
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
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.
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
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.Shenille Engelhart, Owner – CLS Technology
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.
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
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
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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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
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.
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
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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
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
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