Resources

Beware the Benchmark Valuation

Posted on August 5th, 2022

You can practice some back of the napkin math to value a company, but it’s not always reliable. A company with $3 million in EBITDA, may, as a general rule of thumb, sell at a 4x to 6x multiple. In other words, it might sell for $12 million to $18 million in an average market.

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Double Benefit or Double Whammy

Posted on August 1st, 2022

When you sell in good economic times, most times your cash flow is growing, so you get more value out of your business. But multiples are also going up, so you get the benefit of rising cash flow plus rising multiples. Unfortunately, the reverse can happen in a down economy.

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How will rising interest rates affect M&A?

Posted on July 17th, 2022

There’s zero doubt that interest rates are going up this year. The Fed issued a 0.25 percentage point rate hike in March, the first increase we’ve seen since late 2018. But more increases are coming, perhaps even monthly, in the year ahead.   

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Revealing the Reasons Four Offers Varied by $16M

Posted on July 3rd, 2022

During the Cornerstone annual State of M&A Conference held in Green Bay, we organized our own local “shark tank” event. Four private equity (PE) firms were invited to review and submit an offer on a hypothetical company. One by one, they revealed their offers at the event and talked about how they arrived at that value.

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Employee Retention Adds Business Value

Posted on June 20th, 2022

The talent market was tight before the pandemic, but now we’re in a critical state. Finding employees is a challenge for everyone. And if you’re selling your business, it might be the buyer’s top concern.

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Economist Predicts Recession in 2024

Posted on June 20th, 2022

Steven Chiavarone, CFA and economist with Federated Hermes, presented at our annual State of M&A conference held in Green Bay. Chiavarone spoke to the conflict and other economic indicators likely to affect mergers and acquisitions in the years ahead. Specifically, he addressed inflation and the risk of recession.  

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Dealmaking should be strong in 2022

Posted on May 17th, 2022

Inflation, employee shortages, international tension, this little thing called COVID-19… In many years, any one or two of these dynamics could have put a damper on M&A activity and business values.

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Small business values up in 2021

Posted on May 3rd, 2022

Business values increased in 2021, despite ongoing challenges from the pandemic, talent shortages, and supply chain disruption. Deal activity continued at an intense pace, with advisors across the country reporting increases in both incoming deal flow and completed engagements.

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How to buy a business in a seller’s market

Posted on April 28th, 2022

If you want to buy a business in today’s market, this might be just the strategy you want to take. Identify your ideal targets, reach out, and plant a seed. It might pay off now, it might take years, but it’s a way to build opportunity for your business going forward.  

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M&A outlook for 2022: Fast and furious

Posted on March 15th, 2022

Business valuations have hit record highs and deal teams are bracing for what is expected to be the largest M&A run most advisors have seen in their careers. Business confidence, buyer capital, seller burnout – it’s all combining to create a perfect storm of deal activity. 

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