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Optimism Abounds for Deal Making in 2019

By Generational Equity

01/23/2019

We have good news for business owners: The pace of M&A activity reached record highs last year and there is real optimism that this trend is expected to continue in 2019.

This is how our friends at Axial described 2018 recently:

2018 was a busy year for the M&A industry. M&A volume in the U.S. reached a near-record pace through the first three quarters of 2018, with $1.3 trillion in deals announced — a 50 percent increase in activity compared to the first nine months of 2017. On the private equity front, activity remained strong as well. The first three quarters of 2018 saw 3,501 deals completed for a total of $508.8 billion, according to Pitchbook.

The deal teams with Generational Equity confirm this as well. 2018 was a record year for deal making and all signs are pointing to this continuing into next year. Axial explains:

Middle Market Review asked readers what their expectations are for the New Year. Most survey respondents believe M&A activity in 2019 will increase, citing the booming economy, baby boomers’ need to sell businesses, expanding GDP, and a lower barrier to growth given the more favorable business environment promoted by the Trump Administration. What’s more, corporates have increased cash, in part due to tax reform, and M&A is high on their priority list.

What should you expect from deal making in 2019?

The important takeaway from this information is this: With a number of factors impacting the M&A market simultaneously in a positive way, now is one of the best times to market your business to buyers. Seller’s markets don’t come around that often and this is one of strongest we’ve seen in decades.

Most interestingly, there are only two key issues that concern professional buyers about deal making based on the Middle Market Review survey:

Although the outlook for 2019 is strong dealmakers are not worry-free. Middle Market Review readers worry about a lack of quality deal flow and rising interest rates.

This is a common complaint we hear from buyers all the time as well. There simply are not enough good deals for them to see right now, which is really shocking when you look at the data and consider how hot the market is right now. This situation is fantastic for those business owners wise enough to take advantage of this market right now.

If you are interested in learning more about current M&A market conditions and buyer activity, you should consider attending a Generational Equity exit planning conference. Not only will your knowledge about exit planning grow exponentially, but you will also have the opportunity to meet confidentially with one of our exit planning professionals at the meeting.

Use the following links to learn more:

With 2019 expected to be another banner year for M&A and deal making, don’t miss this opportunity to gain valuable knowledge on maximizing the value of your company.

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

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