Powell Nomination for Fed Chair Makes This A Good Time to Sell Your Business
By Generational Equity
12/08/2017
One of the most important aspects to receiving maximum value when selling a business is the timing of the transaction. The recent announcement that Federal Reserve Governor Jerome Powell will be nominated as the next Chairman of the Federal Reserve makes this a good time to consider selling your business.
In the past, Powell has embraced the current Fed policy of gradually raising short-term interest rates.
“The ability to borrow and the cost of borrowing are key factors for acquirers to structure deals and, in turn, sellers to obtain maximum value for their business,” said Terry Johnson, Chief Revenue and Strategy Officer at Generational Equity. “Low interest rates reduce the overall cost of capital and make it easier to finance transactions while still enabling buyers to generate their required ROI.”
“The question isn’t whether interest rates will go up but rather when they will increase,” Johnson said. “Historically low rates are creating a strong demand for growth opportunities through acquisitions in the middle-market we serve.”
According to the National Center for the Middle Market, 25 percent of companies surveyed planned to make an acquisition within the next 12 months, up from 22 percent in 2016.
“The continued strong stock market also makes it easier for public companies to finance acquisitions,” notes Johnson. “We are also finding continued interest by foreign investors, particularly in Asia, for the U.S. firms we represent.”
“While there is a level of uncertainty regarding taxes, interest rates and regulatory issues, there has never been a better time for business owners to fully explore the option of selling,” Johnson said. “Because of the time involved in properly conducting a comprehensive, professional M&A process, indecision at this time could prove very costly.”
Timing Your Business Sale with Generational Equity
Our experienced M&A professionals at Generational Equity are adept at determining the ideal time to sell your company for the optimal value. This is easier said than done. For detailed advice, consider joining us for an executive exit planning conference.
Held regularly throughout North America, our dealmakers give you a thorough guide into the M&A process, especially on building a buyer-ready company that can benefit from ideal market conditions. In just a few hours, you’ll have the information you need to start your exit strategy with confidence.
Generational Equity will help get you there. Call 972-232-1121 or fill out a contact form.