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Merger and Acquisition Projections for 2017

By Generational Equity

01/06/2017

Once again, it is the time of the year when folks start to make predictions for all sorts of things. Our industry is no exception to this, as I’m sure yours isn’t either. I was really looking forward to Mergers & Acquisitions Magazine’s roundtable a few weeks ago, titled, “What to Expect in 2017.” The panelists included some leaders in our industry:

  • Brad Vaiana, Co Head Private Equity Practice, Winston Strawn
  • Mark Poff, Managing Director, Swander Pace Capital
  • Michael Fanelli, Partner, RSM US LLP
  • Mike Hogan, Managing Director, Harris Williams & Co.
  • Scott Spielvogel, Managing Partner, One Rock Capital Partners

The webinar was held on November 16, 2016, so it was post-election, meaning these folks had already been able to internalize and analyze the potential impact of a Trump presidency on M&A activity.

The general consensus was this: 2017 should prove to be the continuation of the current seller’s market and, in fact, may pick up steam in many sectors.

Here are some other general points that were made:

  • The best way to grow a strategic company, and the fastest way to expand a platform holding, is via acquisitions. Organic growth is simply not strong enough.
  • 2017 should be a good year for sellers because there is nothing systemic brewing in the economy that should have a negative overall effect on M&A.
  • The election of Donald Trump should only help to boost business confidence, and when buyers and sellers are confident about the future, deals get done.

This is positive news for business owners contemplating an exit event in the pending 12+ months. However, this is really only good news for those who have an action plan in place to pursue. As we have said before, in many cases it takes 1-3 years to fully prepare a company for buyer evaluation, so getting started sooner is far better than later.

We often ask business owners this series of questions:

  • What value-building strategies have you implemented in your business the last 12 months?
  • What do you plan to introduce in 2017 to make your company more attractive to buyers even if you are not selling this year?
  • How are you actively making your company “buyer ready”?

The answers to these questions are vital for each and every business owner in North America and beyond. If you have no real responses to these three questions (or worse yet, you are unsure how to even answer) then you need to reach out to us.

The Generational Group is one of North America’s leading middle-market M&A groups. We connect business owners with tens of thousands of global investors, giving us an unparalleled view of the market. Our recent 2016 Investment Banking Firm of the Year Award speaks to the commitment our dedicated professionals have to our clients.

If you would like to learn how our services could help you reach a successful exit event, then call me at 972-232-1125 or email me at cdoerksen@generational.com.

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

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