A few weeks ago, our friends with Merrill Data Site released their prediction for 2nd quarter M&A deal closings in the U.S. As other sources have also shown, deal closings based on Merrill’s data will be up around 10% in the second quarter over the previous year.
Merrill is in a unique position, allowing them to provide valuable estimates of future M&A transactions. For those of you unfamiliar with Merrill, the company provides secure, cloud-based virtual data rooms (VDRs) that deal making professionals use to exchange deal data with buyers and sellers.
Although the information shared is completely secure and confidential, Merrill is allowed to tabulate the opening of VDRs and on a quarterly basis makes accurate predictions of pending deal closings from the number of VDRs in their system. Since they are one of the leading VDRs in the industry, their data is very reliable and provides a good window on pending deal making.
Here are a few key additional points from Merrill’s latest M&A Deal Forecaster:
Following the passage of the new US tax bill, optimism about 2018 M&A abounds. “People were waiting for the smoke to clear,” says Peter Hawthorne, VP Corporate Strategy and Development at Cargill. “For both onshore and offshore investors, it provides clarity.”
"U.S. Companies can now bring cash back home, so I would expect an inflow of repatriated corporate cash to fund domestic M&A,” agrees Jonathan Rothenberg, SVP Corporate Development and M&A at GlobalLogic. “It’s been ten years since we’ve had as good a regulatory environment to invest, plan and do business in.”
As we have indicated in past posts, we also believe that the clarity in the market now regarding tax policy will provide further impetus to our expanding M&A seller’s market.
This is great news if you are in the market right now with your company and are actively looking or negotiating with buyers. But what about the millions of others of you that are not? Delay can be very, very costly.
Did you know that of the 15 million privately held businesses in the U.S. nearly 60% are owned by folks who were born prior to 1964?
Let that last statistic sink in for a moment. Then do the math: Around 9 million business owners, one way or another, will be faced with exiting their businesses over the next 10 years or so. Certainly, many will simply close the company doors. Others will turn the keys over to children, younger siblings, or employees.
The wise ones will hire M&A advisors and will be able to find premium buyers for their businesses. This is the route we suggest that business owners actively investigate. Don’t delay until after this seller’s market ends (estimated by many to be at the end of 2019) when overall valuations will drop. And certainly don’t wait five to ten years to enter a crowded market with the millions of baby boomers who will be desperate to sell.
Selling a company is a PROCESS, not an EVENT. Wise folks will understand this and proactively plan for their exits.
To learn more about M&A transactions and how you can successfully prepare for your exit, call us at 972-232-1121 or visit our contact us page on our website and we will be in touch. Generational Equity is one of the leading middle market M&A firms in North America. Our track record speaks for itself:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
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
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
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 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
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
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
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
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
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
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
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
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 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 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
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
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