One day last month I was reviewing our newsletter archive on the TOBIN website and this newsletter caught my attention – “Acquisition Accelerates Growth … if You Can Find Eligible Candidates.” It was published March 17th of this year.
Back then, a mere nine short months ago, it was hard to find candidate companies to buy because of the overly competitive and highly priced, some might say overpriced, market environment.
Funny how fast things change!
Now public markets, private markets, and the M&A market have all changed. The consensus today, at least in theory anyway, is that all of these markets have slowed as prices have had to find new footing because of increasing interest rates, declining earnings and contracting multiples. To some that might seem like a bad news for M&A, but these new dynamics mean opportunity for business owners. Many sellers are interested in discussing options for cashing out some, or perhaps all, of their business’ equity. Many buyers are interested in entering the market because prices may not be as high and they believe that there is less competition to buy the companies that they want. Buyers and sellers, and advisors like us, now have a little more bandwidth as we all take a breather from the crazy M&A market of the past three years.
The changes also mean that smaller sellers, like our clients, can now get the attention of buyers. For the most part that wasn’t possible over the past few years because the M&A market was white-hot. Because many smaller companies continue to perform very well, owners are in a great position to monetize their long-nurtured gains. This is exactly the time when private equity firms are more eager to accept calls from sellers, and when strategic buyers are seeking smart opportunities in the changing environment.
This May be the Perfect Opportunity to Monetize Equity in your Business
If you are considering cashing in some, or all, of your business value, call Tobin & Company. We’re glad to discuss your needs and goals, along with whether our different approach to sell-side, and buy-side, mergers and acquisitions may be right for you.