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Tailwinds Continue for M&A Deals in 2017

There are good indications that the favorable tailwind continues for M&A activity in the coming year.  Key indicators paint a clear picture: buyers are actively seeking opportunities that advance their strategies. Owners are aging, and looking for transition options.

Citizens Bank Commercial’s annual study on the appetite for M&A deals found that “he number of mid-sized U.S. companies already engaged in or open to buying and selling has risen sharply since last year, setting the stage for a very active 2017 merger market.” [1] Among the findings:

  • 53 percent either currently involved in or open to considering a deal, compared to 34 percent last year
  • The number of buyers is increasing with 73 percent currently involved in or open to considering deals, up from 60 percent last year.
  • Mid-market decision makers feel company valuations may not have peaked just yet.

Allstate/USA Today have developed a Small Business Barometer based on input from thousands of owners across all markets. It found resilience and optimism with 90% believe the benefits of ownership outweighs the challenges. Also, 70% feel their businesses have grown the same or more as last year. Often these businesses are best transitioned using M&A sales processes.

 The most recent Market Pulse survey, a survey we participate in and which is conducted by M&A Source and IBBA with Pepperdine University, reveals that deal multiples remain very as strong as 2015. Also, there are more well-funded buyers in the market now than top quality sellers, so the seller market continues.

The M&A process that we use involves actively seeking strategic, synergistic and financial buyers. We welcome the opportunity for an exploratory conversation, whether a sale is in the short or longer term. It is nice to learn about your business and to start talking about possibilities.

Footnote [1] Middle Market M&A Outlook 2016, Citizen Bank Commercial

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