M&A Market

The Exit: Options for Montana Entrepreneurs

This article, written by Bryce DeGroot, was originally published in the Montana High Tech Alliance newsletter. 

Entrepreneurs are visionary leaders who are driven by ideas and execution. They are intensely devoted to building their company.  It should come as no surprise that most business owners spend little time planning for the inevitable fact that they will someday exit their company.

The decision to sell a company or a share of equity can be driven by personal goals such as retirement, the need to free up time or capital for the next venture, or business strategy.

The best exit strategy weaves together the company’s growth strategy and long-term exit planning into an outcome that maximizes value and achieves the shareholder’s personal goals.

2016 Private M&A Market Report

We are pleased to share that we recently published our 2016 M&A Report. We published it to provide insights for business owners and advisors in the lower middle market. It focuses on activity in 2015 and expectations for the remainder of 2016.

Report highlights include: 

  • Deals by buyer type
  • Valuation multiples
  • Interview with an active buyer
  • Buyer perspectives on 2016

To download the report, please click here: http://www.compass-advisors.com/reports/

Insiders' Take on 2015 M&A Activity

Without question, the M&A market has been extremely active in 2015.  Both buyers and sellers have benefited from it.  Axial, an online network for business transactions, recently surveyed 100 deal professionals, including advisors and private equity investors.  They were asked for their take on M&A activity for the rest of 2015, what's in the way of completing deals, and growth strategy.  Click below to hear what they said: 

Family Businesses Struggle with Succession

PwC (PricewaterhouseCoopers) has conducted the US Family Business Survey since 2002. Since their first report, the economy has changed drastically. In the 2014-2015 survey PwC recently issued, they provide interesting insights on family owned businesses throughout America. To get diverse data on the state of US family firms, they interviewed 154 businesses across sectors and lifecycles.

Overall, owners tend to be more optimistic than in 2012. But the optimism is not without challenges in the background. Many are trying to adopt new technology to compete in the post-recession economy, deal with changing market conditions, and still face the ever-present reality of succession planning. 

Ready, Set, ...Acquire

Growth strategies take different forms.  On a basic level, companies grow like they always have: finding a problem, creating a solution, and selling it for a profit. Companies can then grow by increasing their market share with current or new customers. Companies grow similarly, regardless of economic downturns. But, sometimes, because of micro or macro economic conditions growth strategies can change, or a complete pivot can occur. An increasing number of companies are looking to mergers and acquisitions (M&A) as that strategy.

What Can We Learn From the LA Clippers Sale?

When you heard that the LA Clippers sold for $2B, what did you think? That’s a lot of money was what crossed my mind. But then it struck me: a number of lessons could be learned from the sale. Why did it get $2B when many thought it would go for less than $1B? Why did the parties move so fast? How does this apply to smaller, private companies?

All great questions. All applicable if you own a company.

U.S. Companies Expect Growth (Which Means More Acquisitions)

EY Capital, a global leader in assurance, tax, transaction, and advisory services, recently published their Confidence Barometer Survey.  They interviewed 1,600 executives from 72 countries.  The executives represented companies from 20 different sectors. Here are a few statistics from the EY Capital report: 

  • 69% expect global deal volumes to improve
  • 35% plan to pursue an acquisition  
  • 65% see the global economy improving

All things are pointing towards more deal activity in the next year.

Will the Rest of 2013 See Activity Like the Prior Two Years?

Summer is a time for vacation and relaxing. This is the case in the M&A industry. More vacations means less activity. But activity is expected to climb as deal makers get back into the flow. 

What is the market expected to do post Labor Day? Billy Fink from Axial provides insight into this question:

“If the Post-Labor Day Boom holds true in 2013, we should begin to see increased activity in the next few days and weeks. In 2011 and 2012, the difference between the pre-Labor Day low and October’s peak deal flow was nearly 3x. If the same trend appears this year, we could see 300 deals per week sometime before the first of November.”

Click here to read the article. 

Critical Value Factors When Selling a Business

Part 3 of 3 in the Big Sky Business Journal

In a past column, we reviewed some high level considerations for a business owner who is thinking about a future ownership transfer. The article followed a conversation with Jim, who is a business owner wanting to make sure he has a valuable and sellable business when he decides to retire. In this article, we will look at some of the top factors that make a business valuable and sellable.

Value drivers are the business attributes that give a business real and perceived value. A buyer's questions will be centered on the value drivers in the business.