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Smaller Transactions Remain Popular with Buyers

By Generational Equity

08/10/2020

According to second quarter data from Pitchbook, smaller transactions continue to retain traction despite the impact of COVID on M&A transactions overall:

M&A Numbers by Size

As you can see from the chart above, over 60% of all North American M&A transactions in the 2nd quarter of 2020 were valued under $100 million. This is what we call the “lower middle market” and it is the valuation range that Generational Equity has had the most success over the years.

But most importantly for you, if you own a company in that value range, the reality is that buyers are still very active. In fact, Generational has had two of its busiest months in June and July of this year in terms of deals closing, despite the impact of the pandemic.

The key, of course, to successfully finding investors or buyers for any company is how well prepared the business is for due diligence  AND, perhaps even more importantly, how well prepared the business owner is to actually exit the business.

So how well prepared are you? How dependent is the company on you for all key decisions? Are all client relationships based on your friendship with them? How many suppliers of your materials do you have? Are your financials in good working order? Finally, and most importantly, how truly committed are you to the exit process?

Key questions one and all…

If your answer to any of these is “I am not sure”, then you need to attend a Generational Equity growth and exit planning conference soon. These meetings are designed by business owners for business owners and are created to educate you on the optimal process to exit your business for maximum value.

To learn more, please use the following links:

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

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