On an annual basis, the national law firm Dykema Gossett LLC surveys several thousand top business executives on their M&A outlook. These leaders run a variety of companies, with revenues ranging from below $1 million to those with over $1 billion.
It is a comprehensive study and gives us a good reflection of where these key executives see M&A heading. Here is a summary of their findings for 2018:
The M&A market is expected to get stronger, according to Dykema's 14th Annual M&A Outlook Survey. Nearly two-thirds, or 65 percent, of executives questioned said they believe mergers will strengthen in the next 12 months. Those execs with negative sentiment, dropped to 15 percent, Dykema said. Interestingly, only 39 percent of those surveyed in 2017 were positive about the M&A market.
You can see the four-year trend in this chart:
As you can see, after hovering in the upper 30% range for three years, respondents were very bullish in 2018. Not surprisingly there is a correlation between expected M&A activity and their views on the economy’s growth:
The chart above also shows how closely M&A expectations track buyers’ and sellers’ views of a recession. See how large the negative percentage was in 2008, in the height of the Great Recession, compared to this year.
Finally, most interestingly, the Dykema survey found three issues that were regarded as obstacles to closing transactions:
Of these, the one that I find most interesting is the “availability of quality targets”. We hear this from professional buyers that we deal with quite regularly. They point out that they simply can’t get enough inventory to look at right now given the record pace of M&A activity over the last several years.
What this study clearly shows is that the current seller’s market is anticipated to remain strong going into 2019. This bodes well for any business owner who is actively in the market now or is planning to launch at the beginning of the year.
But, what continues to surprise us is the number of quality companies that are not actively in the market because ownership is trying to “time” the sale to coincide with the top of the market. If that sounds like your strategy, be very careful.
History is filled with business owners who delayed going to market in 2007, the last year of the past seller’s market, only to get hammered by the Great Recession. And, even if they survived, they had to wait 7-8 more years than planned simply to get the business back to where it was.
Fortunately for you, there are answers to the question of when to go to market, and you can find them at one of our complimentary exit planning conferences which we hold around the U.S. and Canada. In one day, your knowledge base regarding how and when to exit for the most profit will expand exponentially. Here are some links you can use to learn more:
If you would like to download a copy of the tremendous Dykema 2018 study, you can do so here:
Please do yourself, your family, and your financial legacy a favor and don’t let this seller’s market pass you by! It could be years before the next one arrives.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Group’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Group to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Group is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.