Insights & Info

Insights > Merger and Acquisition Activity Remains Strong, Says FactSet Mergerstat

Merger and Acquisition Activity Remains Strong, Says FactSet Mergerstat

By Generational Equity

m & a activity remains strong

The volume and value of deals closed so far this year is outpacing 2014 by a good margin, according to data released recently by FactSet Mergerstat. As you can see in the following graph, the trajectory of deal closings had its best two contiguous months in June and July of this year in quite some time:

Source: FactSet Mergerstat

This certainly bodes well for the rest of the year since M&A transactions typically slow during the early summer months due to holidays. It becomes harder to close deals due to vacations, so two solid months like June and July provide us with renewed confidence that the current seller’s market we find ourselves in will remain strong.

Most interestingly, according FactSet Mergerstat, the deal category that grew the most from July 2014 through July 2015 was the category described as “undisclosed” deals:

Source: MergerStat Factset

A 13% deal volume increase in this category during the past 12 months is telling. You have to realize that most M&A transactions that are valued below $100 million are closed without either party (seller or buyer) disclosing the value of the deal. So the vast majority of these “undisclosed” are smaller deals.

Why is the value not revealed? Given the reality that most of these involve a private seller, you can understand how important it is for the seller, and in many cases the buyer, to keep intimate deal details confidential. For example, Generational Equity never reveals these details when we are given permission to publicize a completed transaction. Most M&A firms that operate in the lower middle-market have the same policy.

Are You Prepared?

The demand for smaller deals is quite strong right now, as we have discussed in other postings. Sadly, most owners of privately held companies are not positioned to take advantage of this trend. Most are unaware that we are in a seller’s market, assuming that only billion-dollar deals are closing since that is all they hear about in the media. Secondly, those that do want to take advantage of the current environment and monetize their largest asset are unable to do so because they lack the knowledge of how to effectively manage an exit plan process.

Fortunately, Generational Equity and its team of professional, dedicated, and experienced associates is here to void that gap. Our process begins with education: We firmly believe that during the next 10-15 years we will see the largest transfer of generational wealth in the history of the world as aging baby boomers retire and dispose of their companies. We are so dedicated to helping business owners retain as much of their net worth as possible that we have created a complimentary, educational seminar entitled, “How and When to Exit Your Business for the Most Profit: A Planned Exit Strategy.”

A couple of key points leap out at you from this title. First, the “how” and the “when” you exit your business are equally important. We meet business owners all the time who have horror stories of exiting under terms that favored the buyer, not the seller, and the long-term impact on the business can be devastating (most involve selling to employees or relatives with a huge note that the buyers cannot eventually pay). Likewise, far too many business owners exit when circumstances force them to, not when the market timing is right (usually one of the big D’s interferes: Death, Disability, Divorce, Disagreement, Disinterest, and Disembowelment).

In addition, one more key feature in the title is this: most profit. Certainly you can find a buyer for your business using the Internet, Craig’s List, classified ads, making the rounds at the country club, or even putting up a for sale sign. But these methods will typically not yield the most profit to you. The most profit is generated when you follow the last part of the title: using a “planned exit strategy.”

As the old saying goes, if you don’t have a plan, any road will take you there. This is especially true when you consider monetizing your business and using the proceeds to enjoy the remaining years of your life.

Business owners, it is up to you: Do you want to take advantage of one of the strongest M&A markets in years? Do you have an exit plan created and are you following it? Do you have any idea about how to create a “buyer ready” business? If your answer to any of these questions is no or maybe, then you need to attend a Generational Equity M&A Seminar. Don’t just take my word for it, listen to a few of our clients discuss the importance of the Generational Equity exit planning conference:

As you will hear from these business owners, the investment of a few hours of your time will enable you to gain a significant amount of information about how to exit and how to do so wisely. Let me add this: The seminar is NOT a sales pitch. If you would like to meet with us after the conference to discuss your situation, that can be arranged. However, the vast majority of those that attend never hire us; but they do use the information we provide to go forth and make a deal with much better terms than they would have gotten if they didn’t attend our seminar.

Again I will ask you the three key questions you must face:

  1. Do you want to take advantage of one of the strongest M&A markets in years?
  2. Do you have an exit plan created and are you following it?
  3. Do you have any idea about how to create a “buyer ready” business?

Carl Doerksen is the Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.

Make an informed decision

The best decisions in life are informed decisions. We release educational business insights like this every week. Subscribe to make sure you don’t miss the latest news, views and analysis.

Success

Success, you have been added to our list.

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
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 thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
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
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 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.
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
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
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
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
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
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.
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. P.S. Given my experience with GE I felt comfortable enough to sign up with Generation Wealth Advisors!
Tom Currier, Former President & CEO, Rackmount Solutions
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
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 educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
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
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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
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
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
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
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
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
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
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