2017 Tax Reform Legislation and M&A Impact

By Generational Equity

12/21/2017

According to professionals with Generational Equity, an industry-leading M&A firm for middle market businesses, the tax reform bill recently passed by the U.S. Congress is one of many factors that indicate 2018 will be an ideal time to explore selling a business.

"There are a number of items in this tax reform legislation that should enhance the M&A environment," according to Terry Johnson, Chief Revenue and Strategy Officer for Generational Equity. They include:

• Companies repatriating profits now held overseas are expected to use some of those funds to spur growth through acquisitions.
• Lower corporate tax rates will provide increased capital for acquisitions. In addition, interest rates are still near historic lows, providing cost-effective financing to help close transactions.
• Acquisitions remain an important vehicle to achieve growth expectations for shareholders.

"Preliminary indications are that this legislation, coupled with a number of key elements, such as historically low interest rates, will make 2018 an excellent time for business owners to move forward with exit plans," says Johnson. "Hiring a professional M&A advisory firm is a prudent first step to optimizing an exit successfully."

"A big key is that the uncertainty surrounding this legislation has been lifted, freeing up buyers and sellers to proceed," says Brenen Hofstadter, Chief M&A Officer for Generational Equity.

"For example, I had received several offers for a large client in August but the clients have been on the sidelines awaiting the outcome of the tax bill. Having clarity on the legislation will now enable them to make an informed decision."

Johnson adds, "We are currently in one of the strongest M&A markets in years and sadly, far too many business owners will potentially miss this great opportunity to exit their businesses at maximum value. Our goal is to help our clients and their families achieve their financial dreams by taking advantage of these current favorable market conditions."

About Generational Equity

Generational Equity, DealForce, and Generational Capital Markets, member FINRA/SIPC, are part of the Generational Group, which is headquartered in Dallas and is one of the leading M&A advisory firms in North America.

With over 200 professionals located throughout North America, the companies help business owners release the wealth of their business by providing merger, acquisition and strategic growth advisory services. Their four-step approach features exit planning education, business valuation, value enhancement strategies, and M&A transactional services.

The M&A Advisor named the company the 2016 and 2017 Investment Banking Firm of the Year. For more, visit https://www.genequityco.com/ or the Generational Equity press room.