Business owners can best position themselves for sale in the current environment by performing rigorous sell-side due diligence, knowing how to handle activists, and exploring the advantages of strategic versus private equity buyers.
Toronto, ON (PRWEB) June 24, 2016
Business owners can best position themselves for sale in the current environment by performing rigorous sell-side due diligence, knowing how to handle activists, and exploring the advantages of strategic versus private equity buyers, according to Mid-Market M&A: Deal Environment for Sellers, presented by Firmex and Mergermarket.
As global volatility continues, North American mid-market M&A has hit a downturn. In the first five months, the value of mid-market deals in the region sunk 10% year-over- year to US$56.9bn, while volume fell even more sharply, to 655 deals from 896. After several years in which sellers could dictate terms, it has become a buyer’s market in many sectors. And yet, selling opportunities continue to arise and according to four top dealmakers, a variety of sectors will show favorable conditions.
“We continue to see strong interest across the full spectrum of the consumer marketplace: Food, Beverage & Agriculture, Consumer Products, Retail and Restaurant, and Consumer Services,” said Jeff Cleveland, Managing Director at D.A. Davidson. To this point, of the most notable acquisitions YTD, Hudson Bay Company’s purchase of Gilt Groupe Consumer tops the list at US$250m.
Following the trend in large-cap investing, activist shareholders are starting to target mid-market firms, presenting unique challenges to businesses. “There’s really no ‘one size fits all’ answer to the issue of activist investors … mid-market players need to exercise caution [and] shouldn’t automatically buy into every [activist] idea,” explained Mary Ann Travers, Principal at Crowe Horwath. “Activists often come in looking for quick performance improvements to drive their payout, and some of those initiatives can actually leave the company in worse shape.”
Other major factors to consider when evaluating a buyout offer are the certainty and speed to close alongside the advantages and disadvantages of selling to a private equity firm compared to a strategic. “Private equity is the best answer if the owner wants to remain with the business, retain some financial stake, or preserve corporate identity,” said Michael Teplitsky of Wynnchurch Capital.
The complete report is available for download here.
Firmex is a global provider of virtual data rooms and a secure document sharing platform. From its Toronto, Canada office, the company helps run over 10,000 new data rooms a year with more than 75,000 companies worldwide trusting Firmex as their virtual data room provider. Millions of documents are exchanged each year using Firmex, supporting processes that include financial transactions, mergers and acquisitions, corporate governance, regulatory compliance, litigation, and procurement. For more information, go to here.
Mergermarket is a business development and market intelligence tool designed specifically for the M&A sector and provides proprietary intelligence and analysis on corporate strategy across the world. With around 200 M&A journalists talking directly to senior executives, dealmakers and other key players in over 60 locations globally, Mergermarket reports on the whole deal life cycle, from mapping out companies’ early stage strategic intentions to tracking deals before they develop and providing real-time news on live events, thereby creating a large window of opportunity. Subscribers can also mine for trends, patterns and deal ideas using Mergermarket’s comprehensive deals database and regular data-driven editorial analysis and commentary. Visit http://www.mergermarket.com to learn more.