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What to Expect from M&A in 2020

By Generational Equity

M&A 2020

A few months ago, Deloitte conducted their annual survey to gauge predicted M&A activity and trends in 2020. Deloitte’s survey took into account opinions from 1,000 executives and private equity investors and, not surprisingly, most anticipate that the longest-running seller’s market will continue in 2020. According to an article published in Axial, there are two key factors driving this expectation:

There are still record levels of dry powder at U.S. private equity firms, and U.S. corporations held a total of $1.55 trillion in cash at the end of 2019, only a slightly lower number than the end of last year and much of which they plan to use for mergers and acquisitions.

Although slightly less optimistic than those surveyed in 2019, the Deloitte data still shows that expectations for a strong M&A market will continue in 2020:

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Source: Deloitte 2020 M&A Trends

As you can see, 63% of the respondents in 2019 think that 2020 deal volume will continue growing this year, and a similar number feel deal value will increase. Although slightly muted when compared to 2018 results, the fact is that a sizable majority expect 2020 to be an active year. We concur based on early results this year for deals we have in the market right now.

This is great news for business owners that have prepared themselves (and their companies) to take advantage of another year of a record seller’s market. Interestingly, buyers are so aggressively looking for good deals right now that more and more business owners are receiving unsolicited offers for their business than ever before.

This makes the need for hiring professional guidance vital to prepare your business for when the phone rings and, more importantly, prep you to aggressively approach buyers in a logical, well-thought-out manner.

One of the many reasons for our leadership position in the middle market M&A arena is due to the well-developed process we have honed over the years. Buyers who we deal with regularly know that when we represent a seller, our goal is to get as many indications of interest as possible and to create what we call “a limited auction” to obtain the maximum value for our clients.

Do we succeed in this 100% of the time? Of course not nor would we ever claim to. But we do thrive in creating optimal interest in our clients since buyers understand the critical role we play when representing a client in the market.

To find out if we can help you in 2020 (or beyond) take advantage of the current M&A market, contact us and we will confidentially meet with you to discuss your options. To learn more about who we are and what we do for our clients, use these links:

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

© 2021 Generational Equity, LLC All Rights Reserved

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JoAnn Ellis, Owner of Fondren 5 Star Kennels
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Robert Evans, President and CEO of Mealtracker Dietary Software
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Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
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Jay Dinnison, Owner of Sharpe Mixers
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 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
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
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Bil MacLeslie, CEO, ipHouse
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 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
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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Bil MacLeslie, CEO, ipHouse
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Ralph Noblin, President of Noblin & Associates
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 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
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
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.
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
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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
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
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 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.
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
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
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Jay Dinnison, Owner of Sharpe Mixers
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Larry Moore, Owner, A Company Portable Restrooms