Are Private Equity Firms Actively Acquiring in 2016?

By Generational Equity


This is a question that we get quite often at our exit planning seminars. It seems that most business owners are completely unaware of just how active professional buyers are right now, especially in what we define as the lower middle-market, which are generally deals valued below $150 million. As proof of this, I thought I would share a very interesting table that PitchBook, a leading VC and PE research firm, created a few weeks ago for their 1st quarter private equity analysis. Like I was, you will be very surprised to see just how active private equity buyers were in the 1st quarter.

As you can see, the top three most active PE buyers were all in double digits and that was for the first quarter alone. All told, this list of professional buyers made over 150 acquisitions/investments in the first quarter of 2016, a truly remarkable number when you think about it because this only represents the top 20 that have disclosed their activity to PitchBook. It does not include the hundreds of other equity firms making investments in privately held companies in the U.S. right now that rarely, if ever, disclose their acquisition history or plans.

PitchBook reports that U.S. PE firms made 680 transactions in the first quarter of this year. Although slightly less than the same period last year, it still represents a significant number of acquisitions. Quite simply there is just too much committed capital chasing too few deals right now.

What are these firms looking for in general? Well run, profitable, stable companies with proven track records and future sustainability.

Buyers we meet with (and by the way, we have over 34K registered buyers in our database) are continually telling us: Please bring us more deals to look at. If you want to read about why some of the private equity firms on the list above are so active, you can by following these links:

The significant PE interest in acquisitions right now is one reason we are so actively recruiting business owners to attend our complimentary M&A seminars. We are in the midst of one of the strongest seller’s markets in ages and it makes no sense for business owners to stay on the sidelines right now.

Most don’t realize that effectively selling a company for the highest valuation is a PROCESS not an EVENT. Too often business owners get that statement mixed up in their minds and pursue the EVENT at the 11th hour due to external circumstances rather than hiring an M&A advisor early and working the PROCESS to a successful conclusion.

Don’t just take my word for it, listen to a few of our clients tell you why they hired us to manage their process for them:

Carl Doerksen is the Director of Corporate Development at Generational Equity.

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