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Tax Reform Ensures Positive Outlook for Middle Market M&A

By Generational Equity

Tax Reform Positive

Experts are predicting an acceleration of merger and acquisition activity in 2018 thanks to the passage and implementation of the major tax reform legislation signed last year by President Trump.

A recent survey of business leaders indicates an increase in M&A transactions this year. Deloitte's "State of the Deal M&A Trends" report foresees an "increase of merger and acquisition activity in 2018 with 68 percent of corporations surveyed and 76 percent of private equity respondents anticipating an uptick in the number of transactions."

"Concerns about the size and scope of tax reform and the ability of the current administration to reduce the regulatory burden have been largely resolved," said Terry Johnson, our Chief Revenue and Strategy Officer at Generational Equity.

"With reduced taxes, large strategic buyers will have more capital available to reinvest in their growth initiatives, including acquisitions."

Wells Fargo predicts that the repatriation tax holiday will be a huge driver of merger activities as companies forgo capital spending and share buybacks in favor of growth by acquisitions.

"It is our belief that tax reform will strengthen the current seller's market," says Johnson.

"However, the window of opportunity for business owners to maximize their exit can close quickly based on geopolitical events, a slowdown in the economy, or other factors, all of which are largely out of our control."

"Seller's markets don't last forever," says Johnson. "With literally trillions of dollars coming into the market in terms of tax breaks and tax repatriation programs, it is prudent for business owners to recognize this and consider the opportunities in the marketplace now."

Timing an exit strategy to coincide with ideal market conditions is essential in securing the maximum value when selling a business. The acceleration of M&A activity as a result of this tax reform legislation will open opportunities for middle market business owners to exit on the right foot.

But, these conditions won’t last forever. If you want to make a start on your exit journey while the market is strong, join us for an executive M&A conference.

These are completely complimentary and take place throughout North America. In just a few hours, you’ll receive a valuable insight into the inner workings of mergers and acquisitions, and discover what business buyers are looking for.

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
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
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
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Jay Dinnison, Owner of Sharpe Mixers
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Bil MacLeslie, CEO, ipHouse
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.
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.
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
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Robert Evans, President and CEO of Mealtracker Dietary Software
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
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 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
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Ralph Noblin, President of Noblin & Associates
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Andy Graham, Vice President, Modern Heating & Plumbing
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
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.
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
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Bil MacLeslie, CEO, ipHouse
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse