The middle market segment, consisting of companies with annual revenues between $10 million and $1 billion, has emerged as a thriving area of opportunity and growth for business owners and sellers.
Middle market valuations averaged 7.0x and unwavering debt support continued middle market private transactions through Q3 2016 as reported.Analytical databases collect and publishes proprietary valuation, leverage and key deal terms benchmarks on completed transactions valued between $10-250mm.
The climate for M&A in Texas, while for the most part in accordance with the greater M&A market in the United States, definitely has some particular characteristics of its own.
After months of middle-market acquirers describing heavy deal activity characterized by abundant leverage and upward valuation pressure, these trends are fully present in our Data Q1 numbers:
The facts of the matter: There are 5.5 million family businesses in the US. (FEUSA, 2011). Family owned businesses contribute 57% of the U.S. GDP (that’s $8.3 trillion), employ 63% of the workforce (FEUSA, 2011), and are responsible for 78% of all new job creation. (Astrachan & Shanker, 2003).In spite of this potentially surprising presence in our economy, nearly 40% of family businesses in America will be passing the reigns to the next generation over the next 5 years.
In the world of real estate sales most people understand that there are many differences between residential and commercial real estate firms in terms of expertise, types of investors and the marketing process each choose to follow.
Many business owners and many business advisors are unaware that similar differences separate business brokers from merger and acquisition advisors. It is very important to retain the right firm for the sale of any particular business.
Ahhh, deal fatigue. The silent killer of otherwise fantastic transactions. Early signs of deal fatigue are slow responses from either side of the table. It typically sets in a few weeks before the deal is scheduled to close. Feelings of frustration, irritation - worst of all - resignation, can develop in all parties involved in a transaction. Principals, attorneys and bankers alike are not immune to the experience. Tensions begin to run high, small issues become large objections and one party (or both) might give push back rather than trying to work through issues that arise.
It seems easy, right? Build your business and when the timing is right sell it to the right buyer. It should come as no surprise that the skills it requires to develop a successful company differ from the techniques and strategies and experiences employed by Mergers & Acquisitions professionals. We've compiled a quick list of common errors made by well-meaning CEOs who discover the complex world of deal-dynamics and the often complex transaction process.
Acquisitions are never easy. When it comes to technology, seemingly ordinary processes can become troublingly complex. To avoid major disruptions, here are a few strategies your IT team should employ:
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