What to Expect from M&A in 2020

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What to Expect from M&A in 2020

By Generational Equity

03/02/2020

A few months ago, Deloitte conducted their annual survey to gauge predicted M&A activity and trends in 2020. Deloitte’s survey took into account opinions from 1,000 executives and private equity investors and, not surprisingly, most anticipate that the longest-running seller’s market will continue in 2020. According to an article published in Axial, there are two key factors driving this expectation:

There are still record levels of dry powder at U.S. private equity firms, and U.S. corporations held a total of $1.55 trillion in cash at the end of 2019, only a slightly lower number than the end of last year and much of which they plan to use for mergers and acquisitions.

Although slightly less optimistic than those surveyed in 2019, the Deloitte data still shows that expectations for a strong M&A market will continue in 2020:

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Source: Deloitte 2020 M&A Trends

As you can see, 63% of the respondents in 2019 think that 2020 deal volume will continue growing this year, and a similar number feel deal value will increase. Although slightly muted when compared to 2018 results, the fact is that a sizable majority expect 2020 to be an active year. We concur based on early results this year for deals we have in the market right now.

This is great news for business owners that have prepared themselves (and their companies) to take advantage of another year of a record seller’s market. Interestingly, buyers are so aggressively looking for good deals right now that more and more business owners are receiving unsolicited offers for their business than ever before.

This makes the need for hiring professional guidance vital to prepare your business for when the phone rings and, more importantly, prep you to aggressively approach buyers in a logical, well-thought-out manner.

One of the many reasons for our leadership position in the middle market M&A arena is due to the well-developed process we have honed over the years. Buyers who we deal with regularly know that when we represent a seller, our goal is to get as many indications of interest as possible and to create what we call “a limited auction” to obtain the maximum value for our clients.

Do we succeed in this 100% of the time? Of course not nor would we ever claim to. But we do thrive in creating optimal interest in our clients since buyers understand the critical role we play when representing a client in the market.

To find out if we can help you in 2020 (or beyond) take advantage of the current M&A market, contact us and we will confidentially meet with you to discuss your options. To learn more about who we are and what we do for our clients, use these links:

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

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What to Expect from M&A in 2020