Fourth Quarter M&A Activity Looks Bright

Sept. 30, 2010 - PRLog -- Coral Springs, Fla., September 30, 2010 – The March Group (TMG), a leading private mergers and acquisitions company for middle-market businesses, indicates that there is good deal activity this year heading into Q4.

“The deal activity for our clients has been very good this year and looks extremely promising for the fourth quarter,” said March Group Chairman George E. Gifford. “In addition to an increase in deals done, we have a number of client companies currently under LOI (Letter of Intent to purchase) and our total percentage increase of closed deals could well exceed 50 percent by year’s end.”

As March Group Director of Research Carl Doerksen has written in the TMG blog in the last couple of weeks, news about middle-market acquisitions and the company’s own experience with its year-to-date transactions is positive. This is contrary to media reports about how bad the economy is, and in fact, it supports the seemingly radical idea that the worst in the economy is actually over. (Related post: http://blog.marchgroup.com/Blog/bid/45538/Economic-News-R...)

There have been several factors based on news items and statistical reports that reinforce the optimism towards the current market condition, as featured in the TMG blog over the past few months. First, financing is generally more available than it was last year at this time. This is especially true for deals in The March Group niche: the lower middle market. Deals in this niche require less financing to close, so they tend to close more quickly and with less deal-breaking financing issues.

Also, private equity groups (PEGS) are sitting on an estimated $400 billion in dry powder. Since they only have two options with this dry powder (invest it or return it), The March Group is starting to see more activity as PEGS make moves to invest these funds. This should continue throughout the rest of 2010 and into 2011. (Related post: http://blog.marchgroup.com/Blog/bid/44832/Private-Equity-...)


In addition, strategic players are also sitting on a significant amount of capital. In fact, according to Thomson Reuters, strategic players in the U.S. have an estimated $1.8 trillion in cash on their balance sheets. One of the best uses of this cash is investing it in growth via acquisitions. TMG expects to see more of this activity through the end of 2010 and into 2011. (Related post: http://blog.marchgroup.com/Blog/bid/43733/The-March-Group...)

The variety of businesses sold by The March Group so far this year attests to the opportunities that individual buyers and PEGs see — in spite of the not-so-rosy picture of the market painted by today’s media. Specialized services, such as International Orientation Resources’ (IOR) overseas employment and relocation consulting, are seen by buyers like Robert Burns, the individual investor who acquired IOR back in July, as potentially lucrative businesses, especially given how global employment has become nowadays.

This month’s sale of BECO Manufacturing is another strong point. Lee Capital, a New York acquisitions company, purchased the California-based provider with plans to leverage the strong growth opportunities in the solar industry and the other industries serviced by BECO. Currently, BECO provides engineering and manufacturing solutions for multiple industries, specializing in custom, high-purity plastic valves.

Finally, more and more middle-market business owners are realizing that now is the time to enter the market. Not only is there ample capital out there looking for good deals, savvy business owners are also aware of the estimated 8.4 million baby boomer business owners that are going to be retiring and selling their companies over the next 15 years. Middle-market entrepreneurs know that getting into the market before this retirement tsunami hits is far better than waiting. (Related post: http://blog.marchgroup.com/Blog/bid/45363/The-Perils-of-Procrastination)

Clearly, despite mostly negative reports from the media, savvy buyers are taking calculated risks. They have the vision to take newly acquired businesses to greater heights. Savvy buyers are finding opportunity in adversity.

If you were surprised to learn about the positive M&A activity so far this year, it might serve you well to attend a March Group workshop soon. While there, you will learn more about recent M&A activity and why buyers are active. Please give us a call so we can save a spot for you in our next free workshop on this topic. If are like most middle-market business owners, you will be surprised at what you don’t know about current trends in M&A activity!

For more information about The March Group, please visit the following:
http://www.marchgroup.com/
http://www.Corporations4Sale.com
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http://twitter.com/#!/TheMarchGroup

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For nearly a quarter-century, The March Group has advised business owners of value-enhancement techniques designed to maximize value and meet exit strategy objectives. Business owners rely on The March Group, learn more at http://www.marchgroup.com/