One common issue that impacts both buyers and sellers of businesses is uncertainty. Not knowing where the economy is heading can put the brakes on deals harder than most other factors. Over the past several months, pundits and industry experts have noted that the pace of deal making has slowed, largely because of the uncertainty associated with both the presidential election and the correlated impact of the composition of the Senate.
No matter where your politics are on the color spectrum between red and blue, the reality is we now know what the playing field will look like. The surprising events on November 8 will have a resonating impact on deal making, according to an article in the Daily Deal last month. Entitled “Pickup in M&A Predicted by Dealmakers, Following Republican Sweep,” it focused on a series of interviews conducted a few days after the election. Here are some quick opinions on the topic:
There’s going to be “a pickup in M&A,” says Jim Freedman, chairman, Intrepid Investment Bankers LLC, reflecting on the Republican party’s winning the White House and both houses of Congress in the U.S. election. “The general consensus is that there will be a reduction in taxes," Freedman continues. "There will be a reduction in regulation. There will be more of a pro-business philosophy. I think those are all good things for the M&A industry. I’m pretty bullish on what this means for the M&A business.”
“If people conclude, in the next several months, that the transition will foster some policies that will cause some economic activity, then we may see more M&A activity,” says Geoffrey Rehnert, co-CEO, Audax Group.
“My prediction is that it is going to accelerate M&A activity,” says David Bonrouhi, managing director, Calabasas Capital, referring to the election outcome. “Business owners are going to want to get deals done before any new initiatives get passed and slow things down.”
Although it may be too early to predict the direct impact of the election on all M&A activity, one thing is clear: the uncertainty of who will be leading the country, and setting key policies to grow the economy, is now gone.
If you have been delaying your exit plans because of uncertainty regarding the business direction of the country, your wait should now be over. Based on early indicators, it is prudent to expect that quite a few policies designed to foster growth and stimulate the economy will be implemented.
Owners of privately held companies now need to consider this and realize that hundreds (if not thousands) of baby boomer business owners are most likely doing the same mental calculations. Given this reality, it is vital to enter the market sooner rather than later, since quite a few business owners are probably going to wait and possibly face a glut of business for sale in the market at the same time, which typically depresses valuations.
If you are interested in learning more about current M&A trends and how you can eventually exit your business and achieve your hard-earned financial security, I invite you to attend a Generational Equity exit planning seminar. We hold these throughout North America and they are designed to provide business owners with a wealth of information on the entire process of finding buyers/investors for their businesses. Here is what a few business owners have told us about attending one of our seminars:
If you would like to find out more about our services and/or our educational process, please call 877-213-1792 and ask to speak with one of our senior business advisors, or visit our website and examine the locations we will be visiting in the next few months:
The key for you will be deciding what kind of business owner you want to be: The type that PLANS to sell or the kind that HAS to sell. Tis far better to be in the first group and take advantage of a possible M&A seller’s market!
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2016 Generational Equity, LLC. All Rights Reserved.
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
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
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
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
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.
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 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 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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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
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
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 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 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
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.
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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.
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.
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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