M&A Blog

We’ve written recently about premiums being paid for the purchase of private companies due to a supply-demand imbalance that has emerged that favors sellers (see “Premiums Being Paid Due to Supply-Demand Imbalance” and “Suddenly, A Business Seller’s Market.”)

In today’s Tulsa World, Fred Russell is quoted as saying, “The value of something depends on what other people are willing to pay.” This may seem like common sense but people commonly forget it in practice. They waste a lot of money as a result.

Mr. Russell’s comment was in an article that appeared in the business section titled, “Dollar Thrifty Investor Lets Go of 5.5% of Shares.”

You knew him. He was the talk of the town. Spent a fortune. Had everything. Then, suddenly, busted. Bankrupt.

Everyone was shocked.

“Things Every Business Seller Should Know” was the title of a presentation David Perkins gave Tuesday to an esteemed group of executives that volunteer their time assisting owners of small businesses. The group, Tulsa SCORE, is an affiliate of the Service Corps of Retire Executives (SCORE) headquartered in Herndon, Virginia and Washington, DC. The organization’s mission is “educating entrepreneurs and helping small business start, grow and succeed nationwide.”

Amazing but true. Premiums are being paid for companies that are selling today. Companies that would have topped out at five or six times EBITDA three years ago are going for seven, even eight today.

I didn’t see it coming but now that it’s here the logic is simple. An imbalance of supply and demand.

Acquisition Advisors has issued their 2010 forecast for merger and acquisitions (M&A) activity in thirteen key industries – Aerospace and Defense, Chemical, Construction, Consumer Products, Energy, Financial Services, Health care, Hospitality and Leisure, Manufacturing, Publishing, Retail Food and Beverage, Technology and Software and Transportation and Logistics.

Another group of business buyer-scammers has been convicted. This time it was a father-son team from Farmington Hills, Michigan. They were convicted in federal court in Philadelphia in November 2009 for “a scheme that allowed them to fraudulently gain control” of businesses and “deplete the assets.”

If you are buying or selling a mid-size business, you have a lot at stake. You also have a lot of questions. You need answers. Answers you can trust.

The principals of Acquisition Advisors are recognized experts on the purchase, sale and valuation of mid-size U.S. companies. They get deals done. Their passion is the art and science of helping business owners receive absolute maximum.

Smart succession planning will be the topic of a seminar for business owners sponsored by the respected law firm of Doerner, Saunders, Daniel & Anderson, LLP.

The date is Thursday, March 4 and David L. Perkins, Jr., Managing Director of Acquisition Advisors will speak.

Business valuation and best practices in the purchase and sale of private companies was the topic of a four hour presentation provided by David L. Perkins, Jr. on Tuesday, January 19th in Weatherford, Oklahoma. The presentation was arranged by Paul Walenciak, an extension agent with the Oklahoma Manufacturing Alliance. It was underwritten by the Western Oklahoma Business Commercialization Center.