As an independent member of the BDO Seidman Alliance, we are pleased to provide you with this informative update on the mergers and acquisitions climate. If you have any questions, please contact one of the professionals in our Merger and Acquisition Services group by calling 440-449-6800.
M&A Activity Update
2012 M&A activity, remaining mostly flat compared to 2011, saw an increase of 1.1 percent in aggregate deal value and 3.5 percent in the number of closed deals, thanks in part to a surge in the fourth quarter largely driven by pending capital gains tax increases. The 2012 EBITDA multiple drop to 8.7x from 10.1x in 2011 partially reflects a decrease in the average size of middle market deals that began in 2010, given that deal size begets value. However, despite the drop, BDO Capital has found that strategic buyers flush with cash and private equity firms looking to deploy capital are both willing to pay up for strong, successful companies.
Blocking and Tackling the Current State of Middle Market M&A
With another NFL season in the record books, one has to marvel at the effort and tenacity it takes to win a Super Bowl. There are many important steps on the path to victory including preparedness, organization and flawless execution. You have to start with raw talent and players with elite characteristics. The roots of a championship take hold with the endurance and strength of the offensive and defensive lines. Brady, Rodgers, Manning and now Flacco, demonstrate that a quick-thinking quarterback is essential to securing the trophy. Having an experienced coach is vital to winning. Of course, a little luck and favorable calls can also help.
Selling your company in today’s M&A environment requires many of the same elements we see in the National Football League. Due to a struggling economy, government gridlock and fickle financing markets, getting middle market M&A deals done at attractive values is no easy task. The process of successfully selling a company is taking longer, involves more steps and requires teamwork at all levels.
Click here to read more about the current state of middle market M&A.
This article originally appeared in BDO Capital Advisors, LLC’s “BDO Capital M&A Newsletter” (Spring 2013). Copyright © 2013 BDO USA, LLP. All rights reserved. www.bdo.com
For more information on Skoda Minotti’s Transaction Advisory Services, contact Mike Trabert by leaving a message below or by calling 440-449-6800.