A recent survey finds that expectations for the middle-market M&A transactions are high for this year among both buyers and sellers, but many are expecting a slowdown in the next two years.
Citizens Commercial Banking’s annual survey of more than 600 companies reveals that business valuations remain at record levels and deals continue to be active, due to current advantageous economic and regulatory conditions. However, “many companies see the economy at a mature point in the cycle and so both buyers and sellers may begin to accelerate their M&A strategies – a process that can take a year or more – to get ahead of an upcoming slowdown.”
- 62% of potential sellers are either actively engaged in an M&A transaction or are open to one in 2019 – a sizeable increase from the previous two surveys.
- 71% of potential buyers are either actively engaged in an acquisition or open to pursuing one this year.
- 52% of sellers say they would consider an international buyer, with the hope they would retain the current leadership team, provide access to global markets, and pay a higher price.
- The majority of buyers see prices rising in 2019.
- Buyers show a strong preference for sellers who engage an advisor, with two-thirds of surveyed potential buyers indicating that it is helpful to the process.
The Bottom Line:
2019 could be a pivotal year for business sales, as we discussed in a recent article. Optimism is still high among both buyers and sellers, and valuations are still high for quality companies, which bodes well for owners who are planning to sell this year.
As an owner, it might be tempting to put off planning, but you don’t want to miss your window of opportunity! Now is the perfect time to prepare for your future and develop your Business Ownership Transition Plan, and take advantage of current strong market conditions and the opportunity to extract as much value as possible from the business you’ve worked so hard to build!
You can see the full report here: https://citizenscommercial.com/1701-MNA/?camp=CTZ1701-MNAE000
Business Transition News
Ever wondered how other M&A advisory firms in your city or region are structuring their fees? The third annual M&A Fee Guide conducted by Firmex and Divestopedia has the answers. With data collected from over 480 investment bankers and advisors worldwide, this comprehensive report provides a global perspective on average fee structures, what is being charged and why.
Bain & Company's tenth annual Global Private Equity Report reveals how top-performing funds are putting capital to work among soaring price multiples and heavy competition.
As 2019 kicks into high gear, there are six major trends emerging for family firms. Family Business Institute summarizes what you should be aware of in 2019.