Will 2013 See Record Valuations for Middle Market Business Sales?

Posted on March 7, 2013

Business owners time their exits for many reasons: health, retirement planning, availability or lack of family successors, competition, technology change, and many more. Yet, overwhelmingly, the question we are most often asked as a financial advisor to entrepreneurial companies is: “What’s my business worth?”

All things being equal, a rational business owner will presumably choose to sell at a point of optimal value for his or her interest in the firm. For the reasons outlined below, we believe that the next eighteen months may see the highest pricing for good middle market companies in the thirty years I have been in the M&A advisory business.

Historically, the market for mergers and acquisitions is one of the most volatile on the globe. In our experience, the market is very cyclical with three to four years separating peaks and troughs and six or seven years to cover a full cycle. The last bull cycle for M&A peaked in 2006-2007 and the market trough was witnessed in 2009-2010. Moderate improvement was witnessed in 2011 and 2012, with Q4 2012 being particularly strong. 2012 was FOCUS’s best year since 2007.

Source: Barclays and Business Insider

2013 started with a bang with large announced deals for Dell, Heinz, and Virgin Media just to name a few. Many observers predict these are not isolated deals and 2013 will witness a resurgence in M&A activity. While the M&A market could be derailed by a major decline in the equity markets or further chaos in Washington, we believe the odds favor a strong market for sales of middle market companies through sometime in 2014. By then a correction will be overdue and the likelihood of a cyclical bear market in equities may become increasingly high. Generally, a serious decline in the stock markets leads to a precipitous fall in M&A activity.

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Categories: Business Acquisition, Business Sale, Entrepreneur, Focus Investment Banking, Focus LLC, Investment Banking, M&A, Mergers, Mergers and Acquisitions, Middle Market, Private Equity, Small Business

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Focus Principal Abe Garver on Bloomberg

Posted on October 15, 2012

Abe Garver, a Focus LLC Principal and a frequent contributor to Forbes, Seeking Alpha and other publications, was featured recently on Bloomberg TV with a big call on the Internet Retail Sector.  Abe is well know for his coverage of the sector and was one of the first commentators to focus on the impending imposition of state sales taxes on Internet retail transactions that were formerly tax free.

Click on photo above to view video.

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Categories: Abe Garver, Amazon, Bloomberg, Focus Investment Banking, Focus LLC, Internet Retail, IT Services, SaaS, Software, Uncategorized

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