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Despite Current Conditions Buyers of Businesses Plan on Being Active

By Generational Equity

Business Buyers Remain Active

Based on a recent survey of 2,900 business executives throughout the world by Ernst & Young - taken AFTER the impact of COVID-19 was felt on the economy - 56% of executives surveyed are actively planning to pursue acquisitions in the next 12 months, an actual increase from October's figure of 52%!

For many of you, this is stunning news. But it makes sense because professional buyers (the kind that you want to sell your business to) know that once the economy begins to return to normal, there will be an anticipated increase in acquisition activity.

In fact, according to Bill Casey, an executive at Ernst & Young who worked on the consulting giant's survey, "I think there will be a tremendous uptick in the level of deal activity."

But you probably are asking: What kind of businesses will they be after? Most likely huge, mega-deals?

Again, according to the survey highlighted in Pitchbook: “For now, many dealmakers are forgoing transformational mega-deals in favor of smaller acquisitions.”

And this makes sense. History shows that it is far more effective, and the ROI (return on investment) better, when buyers acquire 10 smaller companies and merge them over time rather than make one huge transformative deal that often yields poorer results.

Again, according to Mr. Casey:

"Ultimately, companies are going to have to reimagine their business. The world will be changed fundamentally as a result of this, and that will lead to more transactions.”

Although the survey found that 73% of respondents expect the COVID-19 outbreak to severely undermine the economy short-term, 38% expect a quick, V-shaped recovery, with economic activity returning to normal in 2020.

What Does This Mean For You and Your Business?

This is an important question. Right now we realize that there is tremendous uncertainty in the world and we are facing several weeks of continued business disruption. But most experts agree that eventually the U.S. economy will return to some level of normalcy. Certainly, the $2 trillion dollar CARES Act passed recently and the Paycheck Protection Program which is part of it will help sustain many businesses for the foreseeable future.

So what you need to do is begin preparing your business today for the eventual return to business as usual by beginning your M&A journey.  

What is the best way to do that during these turbulent times?

A very good first step is to either attend one of our exit planning meetings that we hold throughout the U.S. or register to attend one of our informative M&A webinars. At either venue, you will have a chance to meet face-to-face or virtually with a Generational Equity M&A Advisor

Our M&A professionals have extensive experience in guiding business owners through times like this. During that meeting, you will mutually determine what the next steps may be for your particular situation in relation to our services.

Keep this in mind: It takes 90-120 days to complete the initial evaluation phase of your business, a critical first step in a professional M&A process. So starting out soon means that you will most likely be entering the market at the point when recovery may be in full swing, and buyers will be most active.

We have never met a business owner that regretted starting the exit planning process too soon!

As you can see from the survey discussed above (and history shows us this too), privately held companies are acquired during all market cycles. The folks that reap the most benefit are the business owners that have built buyer-ready businesses that, coming out of any cycle, are prepared to meet with buyers and generate optimal deals for their owners.

So, if you are interested in being part of this eventual increase in buyer activity, reach out to us at 972-232-1121 or visit our website, provide us with your contact information, and we will be in touch.

If you would like to learn more about Generational Equity and the services we provide please use the following links:

Your Generational Team

© 2020 Generational Equity, LLC All Rights Reserved

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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
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
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.
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
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 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
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
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 would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
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
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Andy Graham, Vice President, Modern Heating & Plumbing
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
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.
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.
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
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
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
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.
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