I think the opening sentences of a recent article in MiddleMarket.com summed up our current M&A environment quite well:
Judging by recent M&A trends during the Covid-19 pandemic, it’s increasingly clear that private equity investors have continued to focus on add-on acquisitions as a growth strategy even more so than they did pre-outbreak.
Add-on acquisitions, or transactions that occur when a company acquires another company that complements the acquiring company’s business model, accounted for a record 72.5% of all U.S. private equity buyouts in the first quarter of 2020, up from 2019’s record of 68.1%.
I thought I would share the article with our readers since most of you are owners of privately held companies and need to be aware of current M&A trends. Entitled “5 Tips for Private Equity Firms Eyeing Add-On Deals in the Pandemic”, it was quite insightful regarding how aggressive PE firms are right now in seeking add-on acquisitions despite (or in spite) of our current economic turmoil.
Because these very savvy investors always are thinking long term. For a standard PE firm, the typical investment horizon is 5-7 years. For others, such as family offices, there may not even be a terminus date picked for a platform company and its add-ons.
So, these professional buyers (the kind of buyers you want to attract) are active because they know the future will be here tomorrow, before we know it, and when it comes, they will be ready to reap the rewards.
You need to view your business the same way: As an investment, NOT a job. Far too many business owners that we meet at our growth and exit planning meetings do NOT realize that the investments they have made in their businesses should provide them with a return on their investment (ROI). This is how professional buyers approach all their potential acquisitions.
You need to as well. Key questions you need to consider include:
If the answer to any of these is “I am not sure”, then you need to attend a Generational executive conference. If you have already attended one, and you are still unsure of your answers, you definitely need to attend another meeting, or reach out to us to get your plan started.
We have successfully helped over 1,000 business owners exit their businesses for maximum value, and countless thousands of others who have attended our complimentary conferences and successfully exited on their own. Either way the time is now to start on your exit journey whether your exit point is 6 months from now, 6 years from now or even longer.
Our team stands ready to work with you as your partner to guide your growth and development so that you too can reach your financial dreams.
To learn more about what we can do to connect you with professional buyers like PE firms, please use the following links:
Carl Doerksen is the Director of Corporate Development at Generational Equity.
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Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.Shenille Engelhart, Owner – CLS Technology
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.
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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.
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We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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
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
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.
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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
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
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
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
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
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