Time is Now for Private Equity Firms!

By Generational Equity


As we have mentioned in past posts, now is the time for Private Equity firms (PE) to be aggressive in rolling up, adding on, and generally being very acquisitive.

A recent article in Axial supports this theme:

This is GREAT news if you are the owner of a privately held company right now! The roll-up strategy (also known as add-ons) allows a PE firm to acquire a platform company and then – via the acquisition of several smaller, synergistic entities – create a much larger holding.

As we have discussed, despite what you may be thinking, we are on the cusp of one of the strongest buyer’s markets in years. In fact, the third quarter, according to Refinitiv, was the strongest 3rd Quarters in terms of deals closed in ages.

Our company’s experience mirrors that – we have closed more deals the last six months than ever before and with over 24,000 NDAs (non-disclosure agreements), which is 45% higher than last year, we anticipate 2020 will be another record year for us.

Who would have even conceived of that back in March?

Here is more good news for you from the Axial article:

Benefits of Being First

Being the first acquirer to approach a target can be beneficial. To determine whether there are independent operators of significant size to be rolled up, buyers can conduct market surveys well in advance of communicating with prospective targets. We advise buyers to think about the revenue estimates and geographic distribution of those qualified opportunities, as well as how auction processes are unfolding in the industry.

The point is that from a buyer’s perspective, you have to move fast now to be the first to approach a target. From a seller’s view, this means that you need, now more than ever before, sound professional M&A advice because buyers being active is great, but they will always be looking to cut the best deal for themselves, not for you!

The reality is that even if your exit plans are in flux, and you are working hard to survive this pandemic, it is NEVER too early to hire an M&A advisor to help you build your business and to make it “buyer ready”.

We created our consulting team because we recognized that building and preparing a business for buyers can often take years and it requires the work of experienced professionals to make it happen. Our Grow and Exit conferences are designed to help business owners learn how to build a business that is buyer ready.

If you have questions about how to build a buyer ready business, you should set aside a few hours and attend one of our conferences. I can guarantee you will not come away disappointed. Here is what a few of our clients have to say about the value of our growth and exit conferences:

Even if you have attended one of our conferences in the past, I would highly recommend that you have a refresher course on the exit planning journey, because so much about the process has become more complex in the past 7 months.  

If you are interested in attending a conference near you, please call us at 972-232-1121 or use the following link to find a conference near you:

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

© 2021 Generational Equity, LLC All Rights Reserved