Business Buyers and Small Transactions – The Truth About Deal Size

By Generational Equity


One of the most dangerous misconceptions that business owners make is that acquirers of businesses are only interested in very large transactions. This mistaken belief is easy to understand since the business press generally only publicizes billion-dollar, mega deals.

As we have seen over the years, the reality is that the vast majority of businesses acquired are much smaller than most folks imagine. This data was once again confirmed by the latest PitchBook summary of 2016 M&A transactions:

Number of M&A deals by size

Source: PitchBook 2016 Annual M&A Report

As you can see, in 2016 nearly 70% of deals (on average) were valued at less than $100 million. Think about that for a moment. As deals get smaller, they are rarely publicized or tracked by any source like Pitchbook. So, if all deals below $100 million were tracked, then the percentage of deals closed in this range would be much higher than 70%.

No matter how you slice and dice the data, the reality to business owners is this: If you own a privately held company, don’t assume that your business would not be a good candidate for acquisition just because your revenue is far below $100 million (or even $10 million).

Until you engage a professional M&A firm that can first value your company in today’s market and then guide you through your optimal options, you will have no idea who might acquire your opportunity.

How do we know this? Because we are approached regularly by business owners who tell us up front, “I cannot believe that anyone would find my company attractive,” only to be pleasantly surprised some months later to realize their financial dreams through a liquidity event.

This could be true for you as well. The best way to learn more is to attend a Generational Equity executive planning conference. Even if you don’t hire us as your advisor, you will learn a significant amount about how to approach buyers. Here are some helpful links to guide you through what we do:

By Carl Doerksen, Director of Corporate Development at Generational Equity.

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