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Survey Says: Middle Market M&A Should Remain Strong in 2018

By Generational Equity

03/13/2018

Recently, Citizens Commercial Bank released a survey of middle market company executives in the U.S. to determine their level of interest in M&A this year. Here is the information regarding their survey process:

In concert with our own team of transaction experts and recent deal closings, we surveyed more than 400 C-suite executives at companies between $25 million and $3 billion in revenue, who are in some manner responsible for their companies’ M&A initiatives. These findings offer an insightful glimpse into themes that deal participants can expect heading into 2018.

Based on the results of their survey, they came to the following conclusions:

  • For buyers, 76% of decision-makers indicated that they are either presently involved in or are open to considering an acquisition in the next twelve months. This confidence appears to stem from their self-perceived strengths. In almost every category, from achieving revenue projections to raising capital and maintaining current market share, buyers believe their business is better positioned than in prior years.
  • In this complex and competitive environment, both buyers and sellers are increasingly reliant on the services of third-party experts. Among those surveyed, more than 90% will seek third-party advice for their M&A transactions in 2018. The biggest reasons are to seek assistance managing valuations and to ensure successful and timely deal completion.
  • Buyers are increasingly confident in the importance of, and in their ability to successfully consummate acquisitions, potentially foreshadowing an even more active environment in 2018 than years past. Almost half of the middle market buyers surveyed believe that outside investment is an appropriate growth strategy, and 40% are extremely confident they will complete at least one acquisition this year, a significant jump in both categories from 2017.

I have bolded key sections in the paragraphs above because they are critical to consider. The fact that 76% of decision-makers in the middle market are contemplating an M&A transaction this year is truly amazing. In addition, the really smart buyers and sellers (over 90%) will be hiring an M&A advisory firm to guide them.

Why You Need an M&A Advisor….

This is an important point: The M&A process is incredibly complex. Even for larger companies that make multiple acquisitions every year, engaging sellers with professional M&A advisors is vital. That is a common theme we hear from our clients regularly. They have no idea how complicated the process can be until they go through it with us:

If you are beginning to consider your exit strategies (and getting started sooner is much better than later), you should reach out to Generational Equity. Our team has a proven track record of M&A success in the middle market:

If you are interested in learning more about what we can do for you and your business, please call us at 972-232-1121 or visit our website, provide us with your confidential contact information, and we will get back to you.

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

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