2019 may seem like a year of reform, trade wars, and financial uncertainty, but it’s also a good time to sell a business. If you have a middle-market business that you believe is ripe for sale, here are some of the top reasons why you shouldn’t hesitate to pull the trigger.
A Rise in M&A Deals in 2019
Investment bankers across the nation can agree that 2019 marks a rise in successful M&A transactions. Based on an industry survey by Deloitte, 76 percent of 1,000 corporate leaders and investment bankers predict an increase in M&A volume and overall deal size.
The predictions for rising M&A deals are based on key drivers that include:
- Current Interest Rates;
- Tax Reform; and
- The Drive For Diversification.
Interest Rates Will Boost Transactions
Interest rates will always be one of the biggest drivers in transactions. The necessary funds for buyers often stem from third-party lenders. So, when interest rates are low, buyers are more likely to start borrowing money and making deals.
With many experts predicting a recession and interest rates decreasing, now is a great time to sell a business and strike while the iron is hot. The cash for buyers is out there, so consider taking advantage of this point in time and get the M&A process started.
2018 tax reforms have had quite an impact on the current state of M&A. Investment bankers say that tax reform is actually one of the main reasons why transactions have become so frequent.
As a middle-market seller, your potential buyer is likely to be a corporate entity. Current tax reform resulted in corporations having lower tax rates throughout the year, adding excess cash for them to spend on M&A.
What does this mean for sellers? Simple; with the right negotiation tactics on your end and more cash-in-hand for buyers, your business significantly increases its chances of selling at maximum value.
Buyers Want to Diversify
Now more than ever, larger companies are eager to expand in and around their current geographic markets. If you feel like you’ve reached the end of the road as the leader of your business, getting out while corporate entities are eager to expand is a great move to make.
Even with the push for diversity, most buyers will pass on a business that has been stagnant for years. Now is the time to start talking with an M&A advisor about the current state of your business and how you can prove to buyers that business is booming with room for growth and increased value.
We Are Still in a Seller’s Market (But Not for Long)
Currently, the number of buyers outweighs the number of sellers on the market. This means that your business is even more appealing to potential buyers at this point in time.
As investment banking advisors, we warn you, don’t wait for the perfect buyer to come along. Get yourself out there and let the experts at Kratos Capital help you create the perfect deal. With the threat of a recession on the rise, as a seller, you won’t be in this position of power for much longer. If you miss out on going to market now, when a recession does hit, you’ll be stuck in your position for at least another five to seven years.
Sell Your Business for Its Maximum Value With Kratos Capital, LLC
As we’ve pointed out in this post, there has never been a more beneficial time for you to sell your business for maximum value. The experienced M&A advisors at Kratos Capital, LLC possess the expertise to prove your company’s value to the best buyers on the market.
Are you ready to take the next big step as an entrepreneur? Get in touch with the investment bankers at Kratos Capital today to get the M&A process started.