Twice a year we attend a deal expo with private equity groups and strategic buyers. It is part of a conference presented by The M&A Source, a professional association of intermediaries who work to bring mid-market buyers and sellers together. I have the honor of being chairman this year.
Why mention this?
It is part of our commitment to continuing education. Conferences have sessions and courses specific to our work. We build deep connections that can be leveraged on behalf of clients. Connections made at this event broaden our list of people who will take our calls, answer our questions, help when possible. It is part of why we can be effective for clients.
If you watch the attached video, it will give you a sense of how it works and why. As Kyle Madden of KLH Capital put it: “The guys and folks we want to do business with are in this room.”
Although selling a company may be your and our ultimate goal, one key benefit for this session is meeting other people interested in growing companies within the mid-market. This group is actively engaged in preserving and growing businesses that create jobs in our economy.
Mega companies often are cutting or consolidating. Smaller, mid-market enterprises with good products and systems are creating jobs. Small business is an engine for the economy.
Allstate/USA Today does an annual survey on the mood of small business owners. It found resilience and optimism with 90% believing the benefits of ownership outweighs the challenges. Also, 79% feel their businesses have grown and will continue to do so. With many entrepreneurs reaching retirement age, these businesses are often best transitioned using M&A sales processes of the type we use.
Most of our clients have companies that fit within the designation, “lower mid-market.” Doug Tatum, in his book “No Man’s Land,” discusses companies that need to grow in order to thrive, with a heavy focus on systems and organization. He notes that growth can be achieved through the organic path, gradually improving and adjusting. Another valid option is to achieve growth through acquisition of another company. Citizen Bank’s survey of M&A activity found that many plan to do just that in 2017 and beyond.
When thinking of selling or buying, credentials and involvement of the advisor and intermediary mean something.
M&AMI, for example, stands for M&A Master Intermediary. It is earned through sales success AND extensive education. CM&AP, Certified Merger and Acquisition Professional, means the advisor has completed a five day graduate level program at Coles College at Kennesaw State. CEPA means the advisor has exit planning credentials. CBI means the intermediary is a certified intermediary, completing a rigorous education program.
When hiring an M&A advisor, check out their involvements. Our clients have found that it makes a difference.
"The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home."
"Skip and I continue to be grateful for all you have done to make the sale of Pure Flow come to fruition."
"BTS’s level of expertise in the process and close attention to detail enabled us to successfully navigate the deal."
"These types of transactions are often long and complicated and I doubt it could have been successfully completed without your close ongoing involvement."
"The outside objective point of view that you have brought us has been invaluable as we prepare for the rapid growth."
"John then found the right buyer and coordinated a seamless transition—he doesn’t miss a single detail."
"John immediately identified our strengths and experiences and discussed a business that ultimately was more in line with our goals."
"The BTS team came in, evaluated everything in a professional and thankfully non-threatening manner."
Looking Back to Plan the Future
As one year closes; another is just beginning. It is an excellent time for company owners to consider the options for what is next.
Growth Through Acquisition in the Lower Mid-market
Growth through acquisition has been a strategy largely used by mid-sized and larger companies for years. Now firms in the lower mid-market are getting into it as well.
PEI Cites 8 Attributes of Quality Deals
Quality deal flow is among the top concerns for M&A advisors. A recent blog posted by Private Equity Information offers 8 key attributes of “quality deals.”
In an M&A Program: Why Consider a Business “Carve Out”?
An M&A program need not be limited in the search to the complete acquisition of a company.
The BIA Report on Consumer Confidence
"NH consumer confidence remains high" according to the latest BIA Survey conducted October 10 and October 18, 2018 by the UNH Survey Center.
Business Transition Snippets
Here are a few observations we culled from sources we regularly review that relate to business transitions.
What to expect in the LOI exclusivity period
A question that often emerges when reviewing proposals for acquisition with owners is the exclusivity period.
Growth through acquisition isn't just for the big companies
Growth through acquisition Is a valid strategy for businesses in the lower mid-market as well as the mid-market.
The exit decision- timing and issues
When should a business owner start thinking about planning their exit? Early! This is a high-stakes decision and should not be first contemplated when it is imminent.
April PEG investments
It is interesting to watch trends in private equity investments. In general, they reflect confidence in the value of making things. Transactions give insights on the broader acquisition environment, p
Precision Machining Company
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production.
Green Product Company
Our client owners could dig in for the long haul…However, this would take five years or more. Owners simply lacked the horsepower to do it.
Water Purification Company and Young Buyers
Owners decided they wanted to retire. They also wanted to be fair to the staff who had been loyal to them. Could the company be sold, the staff retained and the facility remain in use?
Magnetics Company with High Profile Customers
(T)he manufacturer would need to focus on growing EBITDA to capture interest from major strategic buyers and achieve a higher multiple of earnings.