Despite concerns about the continuing strength of the economy, middle market companies have shown remarkable pricing resilience -- however, nothing good lasts forever. Although valuations appear to be holding steady, the number of middle market sale transactions declined to a 20 year low for the month of January 2016. This result indicates that buyers are becoming cautious about completing transactions. If this uncertainty persists, history shows us that valuations will go down. As a result, if you or your clients have been thinking about selling, now is the time.
Private Equity sold more companies than ever before during 2014-2015. Consequently, those firms raised billions of dollars in investor commitments. That money is looking for a home.
At the same time, many strategic buyers need to acquire smaller companies -- with innovative products and sales to specialty, niche markets-to meet their growth objectives.
There are many capable buyers who are looking for acquisition with the right story.
Wondering where to start? Begin the process with understanding your options to enhance value and to determine the right time to sell by answering some of the following questions:
- Which growth strategies will increase value?
- Should I exit now or later?
- Do I want to sell part, but not all, of my company and continue to manage?
- Is my management team qualified to buy ownership?
- Do I want to pass the company to the next generation and how do they pay?
- Will the proceeds of a sale allow me to live at the level that meets my needs and desires?
This article was contributed by a partner, Janas Corporation.