M&A Market: 2019 Recap & 2020 Outlook
2019 was a busy year in the merger and acquisition world. Prosperity Plus had one its busiest years ever. In 2019 alone we were involved in 16 transactions that closed. These were fairly evenly split between assisting sellers and buyers. In addition, we performed 29 business valuations in the year. We had a record number of new engagements as well. With the results we saw in 2019 we have now helped more than 250 companies with a sale, a purchase or a valuation. The total enterprise value of these 250 companies is more than $260 million. In 2019 we further leveraged the processes and knowledge of the Value Builder System to provide even better results for our clients. This system provides a roadmap to increased business value and “sell-ability.”
As we move into 2020, I don’t see anything on the horizon to suggest this activity will slow down. In fact, we have seen more private equity companies coming into our industries. This increase in demand has led more dealers and resellers to consider the idea of selling their business during a strong market. For some, this makes a great deal of sense. However, there are others who have not properly prepared their business for a sale. These folks have discovered that a strong market does not make up for the shortcomings of their business or its financial results. This is especially true when it comes to private equity buyers. They have very strict targets for net income/EBITDA and will often walk away from companies that are not meeting industry model profit levels. The good news is that there will likely be a strong market for at least another few years. This allows time to get your house in order in time to still ride the wave of this activity.
If you are curious about the value or “sell-ability” of your company, please reach out to us. We can give you the insight that can help shape your future. More info on the Value Builder Program is readily available here.