M&A Activity

By Generational Equity

11/22/2011

According to Dealogic, M&A activity in the U.S. is trending to end the year ahead of last year. Does that surprise you? Many of the business owners that we meet at our M&A conferences are surprised to hear this. Because of the negative news in the business press, most business owners assume that our economic malaise also is affecting deal making.

Nothing could be further from the truth. Based on Dealogic’s analysis, year-to-date (through the end of September) a total of 7,533 deals have closed in the U.S. This means we are on a path to have over 10,000 companies sold in the U.S. by the end of the year.

If this holds up, the total number of deals closed will be nearly as high as 2006 when 10,152 deals closed. And it will be 37% higher than the total closed in the midst of the Great Recession in 2009 when only 7,350 deals closed. In fact, on a year-to-date basis, through nine months this year we have already passed the total number of deals closed in all of 2009. You can see this graphically in the following chart.

Source: Dealogic

So when someone casually tells you that current conditions are not ripe for selling your company, you can now pull out this chart and show them how wrong they are.

Bottom line: Because so much of your personal net worth is tied up in your business, planning how to maximize your return on this investment is critical. The more you can learn about how to find and close deals with optimal buyers the more secure your financial future will be. It is simply too risky in today’s economic environment to not begin planning your exit strategy. The best way to start this process is to attend one of our M&A workshops.

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