M&A Blog

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.

Are you the day-to-day manager of a valuable and profitable company? What happens when the owner of the business you manage wishes to sell? You’d like to buy the business yourself, of course, but you can’t afford it. The owner knows this. But the owner has earned the right to have his or her payday. To maximize his or her payday. Selling it to you just does not seem like the path to a sale that maximizes value.

The biggest mistake buyers make is definitely overpayment. It can be heartbreaking. Just last week I met with a former client we helped sell out. He understood the value of skilled assistance, we worked the proven process and he made a lot of money. He then turned around and vastly overpaid for another business (he didn’t use my firm) and he’s really struggling right now.

The hardest part about helping people buy and sell businesses is watching or hearing about business buyers and sellers that made mistakes that cost them substantial amounts of time, money and, often, credibility. As I’ve said, M&A deals are complex, time consuming and risky, and unfortunately there’s a concept that exists, for whatever reason, that great deals are completed by happenstance.

Debt financing remains available for business purchases, it’s just more cautious than it was a couple years ago. Much more cautious. My firm has closed a few deals in this climate but banks have been burned and they must operate conservatively to ensure they have enough capital to withstand any bad debt losses they may suffer in the coming months and years.