The M&A market does not usually respond well to times of uncertainty, such as election years. But in Q3 2020, in a time of uncertainty on top of uncertainty, we’re seeing record buyer interest.
The M&A market does not usually respond well to times of uncertainty. Buyers shows signs of hesitation during an election year, uncertain about the future of the economy or taxes. But in Q3 2020, in a time of uncertainty on top of uncertainty, we’re seeing record amounts of buyer interest.
We just conducted an acquisition search for a company looking to grow in a particular Wisconsin metro area. We identified 125 targets that met the buyer’s criteria and reached out to the business owners to assess their interest in selling.
The primary reason that business transitions are not successful is due to unrealistic expectations. The estimate of value is intended to remedy that. By providing business owners and their advisors with accurate information on the value of their business, they can approach a transition more educated and confident the numbers are on their side. Learn more about us!
With all the upheaval in the world right now, you’d expect M&A deal value to take a dip. But recent market analysis shows that’s anything but the case.
When we talk about recapitalization, we’re talking about a partial sale of a company that allows the owner to liquidate some of the value they have in their business. Typically, this involves selling a part of your equity (usually 70-80%) to a third-party, however some business owners do sell just a minority stake.
SBA relief efforts are incentivizing buyers to move ahead with business acquisitions. Per the SBA website, “the SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current … as well as new 7(a), 504, and microloans disbursed prior to September 27, 2020.”
Recently we have been getting a lot of questions asking if now is a good time to sell or buy a business and how would the business value be affected due to the coronavirus. A lot of businesses are Thriving during the COVID-19. Buyers will take advantage of the incentives offered by the SBA in addition to the already low-interest rates. We are seeing growth in business in the following industries. Click the Link to Find out more:
Ideally, you’ll start preparing for sale early in your business lifecycle. The more you know about what buyers want, and what you can expect from the market, the more options you’ll have to exit your business.
Business owners looking to sell their business, or attract an investment partner, may want to add family offices to their outreach strategy. These private family firms, established by high net worth families to manage their wealth, can offer unique advantages.