The aim of the study was to delve into trends and developments impacting M&A deal making in 2016 and how those issues might impact 2017. As always, their findings were quite enlightening. We will be spending the next couple of postings looking at some of their results to discern how business owners can take advantage of the current M&A environment.
Respondents were asked to rank the top three to five challenges buyers faced in 2016. The top two choices were “sourcing a company that is a good cultural fit,” chosen by 55.2 percent of respondents, and “owners’ willingness to relinquish control,” chosen by 52.4 percent of respondents. You can see the entire results of the question below:
I found the results of this question quite interesting because the top two variables address how challenging it is for professional buyers to close transactions. By far, finding the appropriate candidate to invest in is the largest challenge buyers tell us about as well. That is why they enjoy working with the Generational Group: our dealmakers are skilled in bringing appropriate sellers to synergistic buyers. This saves the buying organization the task of sourcing deals that make sense.
On top of that, we ensure that our clients are, in fact, true sellers, not merely business owners testing the market to determine if there are any buyers active in the industry. How do we do that? First, we charge an initial fee that is refunded from our success fee at the close of the transaction (except in California). The commitment of paying the initial fee is a key first step in gauging a business owner’s true interest in selling.
Secondly, the first step in our proven process is our full and thorough evaluation of the client company. This step usually takes 60-120 days depending on the quality of the company’s financials, as well as the availability of ownership to answer our key questions. Although not nearly as grueling as due diligence usually is, the evaluation nonetheless does certainly test the true goals of our client and their commitment to actually culminating the process with a sale.
In fact, quite often our clients decide to retain the company long-term after our evaluation simply because through our process they realize that leaving the business is simply not the best option for them at that point in time. Holding and growing the company for a later exit point makes more sense.
So, our work clearly removes those unsure of selling from our pool of clients, which, again, is helpful to buyers. Buyers tell us that they have plenty of capital to invest right now; what they lack is time. There is nothing more painful from a buyer’s perspective than to spend three of four months getting to know a target, moving through due diligence, only to have the seller back out at the 11th hour due to cold feet. Our process helps to better prepare the seller psychologically for his/her eventual departure from the business.
However, the most important first step even before a decision to sell is to gain as much education as possible about the process. Knowledge is power and the more you know, the better a decision maker you will be regarding when and how to exit from your company for maximum value. A great place to start your education on this topic is attending a Generational Group executive conference on exit planning. We hold these throughout North America and spending a few hours with us will allow you to examine some key topics like these:
This is just a short sampling of what we cover, to see our full agenda and find out how you can attend, please use the following links:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 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.
By submitting my name electronically and clicking the “submit” button, I understand that I am providing Generational Group, Inc., Generational Equity, LLC, Generational Capital Markets, LLC, DealForce LLC, their affiliates, representatives, contractors, etc. (“Generational Group”) my telephone number, which may include a number that is wireless and/or a number that is on a national, state, or other Do Not Call registry or list. I hereby consent and agree to receive telephone calls including any autodialed and/or pre-recorded telemarketing calls and/or text messages (telemarketing) from or on behalf of Generational Group at the telephone number provided. I further consent and agree that telephone calls may be made using automated technology such as an automatic telephone dialing system, artificial or prerecorded voice, or SMS text messaging. Consent is not a condition of purchase. I further warrant and represent that any telephone number provided is not on any state or national Do Not Call Registry and that by agreeing to these terms and conditions that if any number provided is on any such registry, I hereby consent and agree to receive telemarking calls and/or communications including any phone calls, text messages, URLs, links, emails, etc. to the telephone number(s) and/or any e-mail addresses provided. I understand that by entering my name in the electronic form provided, that I am signing my name as equally as if it was my handwritten signature and that it is my intent to provide an “electronic signature” as that term is defined in state and federal law, as well as industry practices for e-commerce.
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.