Analysts with Generational Equity, a leading mergers and acquisitions advisory firm for privately held businesses, are reporting an increasing demand for lower middle-market acquisitions by private equity firms.
According to a survey by PitchBook, close to $119 billion was invested by private equity firms in the first quarter of 2017 alone. And, according to the research firm, nearly 50% of those deals were valued below $25 million; evidence of the interest private equity has in lower middle-market businesses.
"The decision to hire an experienced M&A firm may be the best and most important decision a business owner will ever make, particularly when it comes to having the opportunity to sell to a private equity firm," said Terry Johnson, Chief Revenue and Strategy Officer with Generational Equity. "These firms have deep pockets, are open to flexible deal structure, and are in the business of acquiring companies to add to their portfolios. Gaining access to these private equity buyers is one of the many value adds the right M&A firm can bring to the table."
Generational Equity uses an extensive multi-step process that helps prepare a company for sale, improve buyer-readiness, identify potential strategic and financial buyers and then manage the sales and marketing process to help the business owner achieve their individual specific goals.
According to Johnson, "Equity firms look at hundreds (in some cases thousands) of opportunities every year. You need to make sure your business gets through the noise and is seen. That's a core competency for us; our dealmakers are experts at it."
Generational Equity Dealmakers work with thousands of buyers every year and have a database of more than 30,000 buyers, domestically and internationally that they interact with.
Generational Equity recently assisted in the acquisition of Fogco Systems, located in Chandler, Arizona by Pinewell Capital. Pinewell Capital, located in Scottsdale, Arizona, is a private equity firm focused on investing in lower middle-market companies. The firm seeks to partner with experienced business owners in management buyouts, management transitions and companies pursuing funding to grow.
In addition, Generational Capital Markets, a Generational Group company affiliated with Generational Equity, assisted Fort Wayne, Indiana-based Ellison Bakery, Inc., a leading manufacturer of cookie, snack bars and other products for the retail and private label space, find a partner in Blackford Capital, a national private equity firm headquartered in Grand Rapids, Michigan.
Founded in 2000, Blackford Capital is a private equity investment firm that acquires, manages, and builds middle-market manufacturing, distribution, and service companies.
"Private equity firms are active buyers who recognize value and are willing to pay for it," said Johnson. "Failing to tap into this market when selling a business can unnecessarily limit a business owner's options, and potentially cost an owner millions."
Generational Equity offers complimentary executive exit planning conferences that discuss the opportunities and various options when selling a business, as well as the proven steps that must occur in order for the business owner to achieve the optimal sales price and terms. Find a conference near you or get in contact with a Generational Equity professional advisor today.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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
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
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
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
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.
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 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.
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.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
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 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
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 must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
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
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
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’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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