For the past few posts we have been looking at the results of the 2016 M&A Survey conductd by Deloitte a few months ago. We’ve looked at a number of related topics and today we are going to enlighten you on just how much competition your business will face as you approach buyers.
Deloitte surveyed 2,292 executives with U.S.-based corporations and private equity firms, and two of the questions asked caught my attention. Here they are:
OK, so these are professional buyers, the kind of buyers you want to approach with your opportunity. As you can see, and this is really amazing to consider, 37% look at 6 or more targets every year and 27% close on six or more.
What does this mean to you? Simply this: If you approach buyers without professional M&A guidance, you are going to be thrown into a pool of dozens of other targets, many of which WILL be using M&A experts. This means that you will have to work very, very hard and create some great documentation in order to cut through all that noise and get your business noticed.
That is a real challenge if you are a professional deal maker; it is even more so if you are selling your first company ever. Most business owners close one transaction in their lives, and most have no idea going in what it will take. This puts you at a huge disadvantage, because, according to a recent study, privately held owners benefit dramatically by hiring an M&A advisor to guide them. Here is a summary of the study’s findings:
We find that private sellers that hire advisers receive significantly higher acquisition premiums.
Why does this happen? Because M&A advisors produce documentation that is believable, accurate and most importantly, in a format that professional buyers are used to seeing. This moves our clients, for example, to the top of the pile when a buyer is looking at a few dozen opportunities in an industry.
The important thing to remember as you think about eventually exiting your business through an M&A event is this: You will have lots of competition for the eyeballs of buyers. And you only get one chance to make a favorable impression. Don’t go cheap! After all, nearly your entire net worth is tied up in one asset, your business.
To find out more about the professional services the Generational Group offer, please follow these links, and if you have any questions after doing so, feel free to call me at 972-232-1125:
(You can read the entirety of the Deloitte 2016 M&A Survey here)
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2016 Generational Equity, LLC. All Rights Reserved.
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.
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
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
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 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
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.
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
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 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.
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 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.
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
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 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
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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
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 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 thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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