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Companies Making Strategic Acquisitions Create Opportunities to Sell Your Business

By Generational Equity

Sep 7, 2016, 03:00 et

Recently, the nation's largest mattress retailer announced it was being acquired by a company based in South Africa. According to published reports, the acquisition is part of the acquiring company's goal of expanding into the U.S. market. While many large transactions make the news, the fact is that there are many private equity firms from the U.S. and abroad looking to invest in mid-market companies.

According to PitchBook, "midway through 2016, over $154 billion has been raised across 195 North American and European PE vehicles, on pace to make percent 2016 the second best fundraising year since 2008.

Buyout funds made up 77% of total PE contributions during the first half of the year, higher than any other year on record."

"One of the key factors in maximizing the value of your business is understanding and identifying people who would consider your business a strategic acquisition," said Terry Mackin, Managing Director of Merger & Acquisitions with Generational Equity, a leading North American M&A consulting firm.

"Someone making a strategic acquisition may see more value in the company being acquired than another buyer who may not have as much of an integral understanding of the space."

Many private equity firms are seeking highly targeted acquisitions that focus on a fragmented industry with growth prospects. They will often seek out a platform company and then spend the next 5-7 years bolting on to the platform with the acquisition of smaller businesses, usually quite a bit smaller than the original platform company.

"Since 2006, add-ons (also called bolt-ons) have been a dominant way to grow for many equity players," said Carl Doerksen, Director of Corporate Development with Generational Equity.

"The era of acquiring a billion-dollar player and hoping to help it grow are relatively rare now, so many private equity firms are moving to smaller transactions."

"The equity firms we deal with, many of which specialize in transactions valued below $100 million, invest in companies with a great upside that will benefit from professional management to thrive and grow," added Mackin.

"Unfortunately, many smaller companies are not prepared to take advantage of private equity offers because they have not prepared their company for the sale process."

"Others, who may wish to sell need professional help in identifying private equity buyers or other potential buyers. Failing to take these two important steps – preparing your company for sale and identifying all of the potential buyers – can leave money on the table for the hard-working business owner," stated Doerksen.

About Generational Equity

Generational Equity, headquartered in Dallas, with over 200 professionals located throughout North America, helps business owners release the wealth of their business by providing merger, acquisition and strategic growth advisory services.

Our four-step approach features M&A education, financial analysis and reporting, sales documentation and deal-making.  Our team was recently recognized by M&A Advisor as Valuation Firm of the Year. For more, visit the Generational Equity press room and Generational Equity blog.

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
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 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
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
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.
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
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.
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 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
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
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
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.
Shenille Engelhart, Owner – CLS Technology
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 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
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
Generational Equity’s assistance was invaluable in compiling and marketing our business.
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.
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 would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
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
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
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