Merrill Corporation, a leading resource supplier to the M&A community, recently published a study entitled, “2018 Corporate Development Outlook & Management Trends.” As you can imagine from the title, it focuses on information provided to them by professional buyers working for corporate strategics and the attention was on their M&A plans for 2018.
The data offered a detailed insight into how buyers are approaching their activity this year. As the majority of our readers are sellers of businesses, I share this in the hope that it informs your M&A strategy going forward with knowledge of what buyers are prioritizing.
One of the first questions professional buyers were asked in their survey was: “How are you going to be deploying your corporate development funds this year?” The overwhelming response (44%) said they would be investing in “inorganic growth” strategies.
For those of you not familiar with that term, it essentially means that they will be buying other companies in order to reach their growth goals rather than trying to grow the businesses from within.
This is a significant realization if you aim to sell a business in this year’s market. Corporate strategics are going to be very active and competing with private equity firms as never before to close deals. Again, great news if you are in the market.
A second compelling question they asked was: “When you hire an M&A advisor, what service is most important for them to provide you?”
Keep in mind that these are not rookie business buyers. Many of these folks are very experienced dealmakers for their companies, closing, in many cases, dozens of deals a year. But in most engagements, they do hire buy-side M&A advisory firms to guide them. (Note: Generational Equity is solely a "sell-side" advisory firm. We ONLY are hired by and work for sellers. This information is being provided for you so you can see that if professional buyers hire advisors, so should sellers).
So why do buyers hire them? A significant percentage of respondents (28%) said that the primary reason they hire buy-side advisors is for sourcing potential opportunities, a.k.a. helping them to find targets to buy.
This reason is why professional buyers we talk to regularly keep telling us the same thing: They simply do not see enough good targets to acquire!
They struggle with finding enough businesses to look at, and this is where Generational Equity can help you, the seller. We connect business owners with buyers who, in many cases, are now willing to pay a premium for well run, profitable, middle market companies.
The key point here: Generational Equity solely focuses as a sell-side M&A firm. We never take any payments from buyers; we only work for sellers. However, because buyers we work with know we are a great source of salable companies, they come to us in droves. In fact, we have over 34,000 registered buyers in our proprietary buyer database who have told us exactly what they are interested in seeing in their targets.
Two key reasons:
Both of these are equally important. Many business brokers do not require a commitment fee upfront to cover their initial costs. Subsequently, the seller can back away at any time and refuse any offer. Generational Equity’s approach helps buyers avoid wasting time on negotiations with sellers who aren’t committed to exiting.
Secondly, our clients have legitimate valuation ranges that we provide them so that when offers come in, they don’t ignore them based on value expectations that are founded on nothing but vapor.
These are two key points why business buyers like to work with us and reflect the reason why buyers also hire M&A advisors: They need professional guidance as well, especially in sourcing good sellers.
We appreciate Merrill giving us insight into the mindset of corporate buyers as we move through 2018. We hope that you have found this info enlightening as well. If so, and if you own a business and do not have an exit plan in place, we invite you to attend a Generational Equity exit planning conference soon.
Held throughout U.S. and Canada, these meetings provide business owners with incredible insights on how professional buyers think and operate. An investment of your time could pay off dramatically. Don’t just take my word for it, listen to what a few of our clients have told us about our conferences:
To find out how you can attend one of our meetings, please use the following links:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2021 Generational Equity, LLC. All Rights Reserved.
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
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
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 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.
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.Betty L. Brennan, President, Taylor Studios
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.
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 most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.Salvo Stoch, Founder and CEO of Sleeping Partners
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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
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 would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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 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
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
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
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 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.
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
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
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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
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
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.
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
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.
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!JoAnn Ellis, Owner of Fondren 5 Star Kennels
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.
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