Today’s M&A Weekly Digest brings you information about what private equity activity means for you, the impact that baby boomers retiring will have on your company’s valuation, and M&A projections for 2012. What does the upcoming year hold in store for private business owners? Let’s find out!
Private Equity Activity – What It Means For You
“As we have discussed before, a significant number of pension funds for example have continued to expand the percentage of funds that they invest in private equity firms…
[W]hat types of companies do private equity firms look for? For the past decade (and many of you will be surprised to hear this) the lower middle-market has been the primary target. This segment is made up of companies valued BELOW $250 million in revenue.”
What does this mean for private business owners? Click here for the full article.
Baby Boomer Retirement – The Potential Impact on Valuations
Some astounding baby boomer facts from the article:
- Approximately 40% of the family-owned businesses in the United States are expected toexperience a leadership change in the next five years due to baby boomer retirements.
- An estimated 65 percent to 75 percent of the small companies in the U.S. – some 10 million – will likely hang up a “for sale” sign over the next 10 years.
- Some sources estimate that almost $5 trillion in liquidity is expected to be created by 2015 as aging baby boomers transition out of their closely held businesses to retirement.
- Beginning on Jan. 1, 2011, the oldest of America’s baby boomer generation started turning 65 at a rate of 10,000 people a day — a trend that will last for the next 19 years.
“The ramifications of this two-pronged crisis could be catastrophic to middle-market baby boomer business owners. Simply put, you have a limited window of time before the sheer number of companies hitting the market potentially overwhelms the buying community. And based on the laws of supply and demand, when supply outpaces demand, prices drop.”
Click here for the full article.
M&A Projections – What Will 2012 Hold for You?
“As we have examined, 2011 was a turn-around year for overall M&A activity. The question now becomes: What will 2012 look like in terms of deal closings? Despite all the economic and political uncertainty, 2011 turned out to be quite a solid year for deal closings in the U.S. Will the same hold true for 2012 or will the volatility impact buying?
No one can predict the future with any certainty…However, a number of analysts are expecting 2012 to be another year of deal growth. You can include Ernst & Young in this category.
According to recent reports, Ernst & Young believes that ‘strong fundamentals, led by an increased focus on growth, should generate an uptick in deal flow in 2012.'”
Click here for the full article.
© 2012 Generational Equity, LLC All Rights Reserved
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