This week we cover two pieces of evidence that are positive economic news, how flexibility is key to reaching an optimal deal when selling a business, and how deal structure and debt are affecting M&A activity. As usual, click on the article headline to read the entire piece.
Economic News – Some Positive Signs of Life
“During the past few weeks, based on the increase in the number of positive economic news pieces I have seen in the media, it is clear that overall the economy is appearing to gain some strength despite the fears of sequestration. Two pieces of data I came across last month illustrated this.”
Selling a Business – Flexibility is Key
“There is an age-old axiom in the M&A industry about selling a business that goes something like this: One buyer is no buyer. Business owners hear this and intuitively they know that it makes sense. In general, the more interest you can generate in your company when you take it to market, the better the offers you will get. This has been borne out recently in the business media with the ongoing battle to acquire Dell Computer.”
Deal Structuring and Debt
“Quite a few business owners in ourM&A conferences are under the assumption that most mergers and acquisitions that occur in the lower middle-market are not heavily structured. To a degree they are correct when compared to the very complicated, highly leveraged billion-dollar deals that we all read about. However, all-cash deals are rare even for smaller companies.
This is not a negative for most sellers. In fact, it has been our experience that the more flexible you are when you negotiate with a buyer, the better your deal structure will ultimately be in many cases.”
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