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Merger and Acquisition Activity Worldwide is Predicted to Increase

By Generational Equity

2018 M&A Activity Growth

According to Intralinks, a leading financial technology provider of virtual data rooms (VDRs) for the global banking, deal making and capital markets communities, M&A activity worldwide is expected to grow throughout the remainder of the year.

The Intralinks Deal Flow Predictor (DFP) forecasts the volume of future M&A announcements by tracking early-stage M&A activity – sell-side M&A transactions across the world that are in preparation or have begun their due diligence stage.

The Intralinks Deal Flow Predictor has been independently verified as an accurate six-month forecast of future changes in the worldwide volume (number) of announced M&A transactions, as reported by Thomson Reuters.

We have analyzed their predictions a number of times over the years and likewise have found them to be a very good indicator of future deal making activity. In their latest DFP they indicate:

According to Thomson Reuters data and Intralinks’ own analysis, the worldwide number of announced M&A deals rose by 5% year-over-year (YOY) in Q1 2018. Based on the levels of early-stage M&A activity which Intralinks has seen in the past six months, our predictive model is forecasting that over the next two quarters YOY growth in the worldwide number of announced deals will accelerate to 8%.

This is very positive news for those preparing to exit their company and is in agreement with ongoing discussions we have regularly with the professional buyers we work with on our transactions. They all tell us that they simply cannot see enough deals; they have so much capital available that it outruns the number of deals they look at.

This also agrees with our own transaction activity. YTD we are 16% ahead of last year in terms of deals closed (and 2017 was a record year for Generational Equity). In addition, we are 26% ahead of clients under dual-signed letters of intent (LOI). A dual-signed LOI is a good indication that a deal will close as it shows that both the buyer and the seller are ready to finalize a transaction in the next few weeks or months (depending on how long due diligence takes).

We are in agreement with Intralinks: The record seller’s market continues!

But Intralinks points out that there are some clouds on the horizon:

Despite such positive underpinnings, we believe that the near-term risks of an M&A market correction are increasing: the M&A market is in the fifth year of its current up-cycle; valuations are at record highs and 23% above their 25-year average; global equity markets are down 7% since their January 2018 peak.

Will Your Exit Strategy Coincide with the Current Seller’s Market?

Sadly, history has shown that all seller’s markets do eventually end. Rising interest rates, stock market corrections, recessions (or fear of them), political turmoil and a number of other factors can individually, and in some cases collectively, stifle and cut off seller’s markets.

So, we are encouraging attendees at our exit planning conferences to carefully review and update their exit plans and timing in the light of where we are in the current cycle.

I have never heard a business owner complain about exiting too soon, but dozens have lamented about waiting too long, until demand and valuations have both dropped dramatically.

Remember that there are two kinds of business owners:

  1. Those who PLAN TO sell
  2. Those who HAVE TO sell

Trust me – it is better to be the former rather than the latter!

To learn more about the current market cycle, how long it might last, and how it could impact your exit timing, you should attend a Generational Equity conference near you. Complimentary and highly educational, these meetings will introduce you to the key facets of creating an effective exit plan and how to time it optimally for you and your family. To learn more about us and about our conferences, please use the following links:

And special thanks to our friends at Intralinks for once again creating a very informative DFP, which we trust will be as accurate as all the rest through the years.

By Carl Doerksen, Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.

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Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
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Betty L. Brennan, President, Taylor Studios
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Ralph Noblin, President of Noblin & Associates
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Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
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Robert Evans, President and CEO of Mealtracker Dietary Software
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Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
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Terry D. Wickman, President, Keytroller
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Larry Moore, Owner, A Company Portable Restrooms
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.
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
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Larry Moore, Owner, A Company Portable Restrooms
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Jay Dinnison, Owner of Sharpe Mixers
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Jay Dinnison, Owner of Sharpe Mixers
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Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
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Terry D. Wickman, President, Keytroller
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward.
Tom Currier, Former President & CEO, Rackmount Solutions
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.
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
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
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