As the new year begins, I want to comment on the M&A year behind us and the one ahead. As expected, the market was strong in 2015. Deal volume hit a new global record by early December, reaching $4.304 trillion, ahead of the previous record set in 2007.
We’re in the process of an office remodel at Cornerstone. As part of that project, we’re pulling down all the pictures of businesses we’ve sold and helping our clients envision the future instead. To do that, we’re asking past clients to tell us what they’ve done with their time and money after their sale.
As you’re thinking about selling your business, it’s time to plan your own bucket list. Because if you don’t spend time looking ahead, you’ll let fear of the unknown get in the way of a sale.
Instead of focusing on price, some sellers are more interested in making sure the company stays where it is, that the employees continue to have jobs, and that the management team gets an opportunity to buy an ownership stake.
Given these priorities, we look at the different ways this company could go to the market.
I’m representing a company out west doing $20 million in sales with $4 million in EBITDA at Cornerstone Business Services. That’s in the mid-tier size for regional businesses, but it’s not enough to get the national players excited about an acquisition. The big firms want opportunities closer to $10 million EBITDA.
But as I contact various strategic buyers in the region, I find a few Boomer business owners who are also looking to sell. So after a few of those calls, I have a different story to tell.
Now we’re partnering with a private equity group that may come in and buy not just my client, but one or two others of similar size. The acquisition makes sense for them because they know they can combine two or three of these businesses and reach that $10 million EBITDA target.
I spent my 10-year anniversary in Indiana, closing a deal. Before you start feeling bad for my wife, let me clarify—it was my company’s anniversary. Ten years ago, I started Cornerstone Business Services. I’d been working in …
This should show business owners, that when it comes to mergers and acquisitions, there’s definitely an advantage in working with someone who continues to improve himself or herself and gain new knowledge. In the M&A world, this kind of commitment gives clients a much higher chance of successfully selling their company.