2017 Tax Reform Legislation’s Impact on M&A Activity

By Generational Equity

12/22/2017

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, Generational Equity’s Chief M&A Officer. “For example, I had received several offers for a large client in August, but the owners 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 added, “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.”

Start Exit Planning with Generational Equity

What is your reaction to the passing of the tax reform bill? Many factors are aligning to make 2018 an ideal year to press on with your exit plans. At Generational Equity, our experienced team put the needs of our clients first, ensuring an award-winning service that is recognized throughout the industry.

If the tax reform bill has left you contemplating your exit strategy, consider attending an executive conference from our M&A professionals. Completely complimentary, these conferences open a window into M&A activity, including how market influences like the tax reform bill, should impact the timing of selling a business.

Contact Generational Equity today to learn more about executive conferences near you and how you can attend. Remember: how you exit your company is often down to timing. Don’t miss your opportunity to maximize your business’ valuation.