How much money is there?

We are often asked “How much liquidity is there for acquisitions these days?”

You will be happy to know that a snapshot from the U.S. private equity market reveals there is three quarters of a trillion dollars in committed funds ready to buy your business.  And this is just one slice of the market, the private equity piece.

global private equity

Thank you to our friends at Fifth/Third Capital Markets for this insight![i]

The value of the record 50,600 of worldwide M&A deals in 2017 was $3.5 trillion according to the IMAA Institute[ii]:

m&A worldwide

 

And in North America, the 2,500 M&A deals were valued at $1.5 trillion

number m&A

What does this mean for you?

There is abundant liquidity in the markets.  Capital allocators are seeking candidates in record numbers to add to their portfolios.  When you get the call from Vertical Capital Advisors, listen!  This is the call you wanted the day you started your business, every entrepreneur’s dream!

 

 

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ABOUT VERTICAL

Vertical Capital Advisors is an Atlanta-area boutique investment banking firm built on creating tangible value for our clients, serving clients in just about every industry.  Our clients are both capital growers and capital allocators.  How can Vertical help your firm maximize value?

 

Joe Briner
Managing Director
Vertical Capital Advisors LLC
briner@verticalcapitaladvisors.com
866-912-9543 ext 108
678-591-0273


[i]
http://images.payments.53bank.com/Web/FifthThirdBank/%7B9603ed24-84b5-4d89-adef-bafbe70713dd%7D_Fifth_Third_Capital_Markets_Market_Update_2018_01_23.pdf

[ii] https://imaa-institute.org/mergers-and-acquisitions-statistics/

One Secret

top secret

In a previous life I was a wealth manager – a really good one.  I rose to the top of my profession, managing about 125 people and over $6 billion in aggregate balances at the Private Bank at Bank of America.  During that time, I advised many business owners to consider selling their businesses or at least a part of them because in the 2000 to 2007 timeframe, multiples were at the peak and the markets were red hot.  Today the markets are white hot and multiples are even higher.So here’s my One Secret: Sell when the markets are high.

Sure, you can grow to $100 million or $1 billion with enough time and enough cash.  Projections are always linear.  It is very difficult to model exogenous events like financial market corrections.  Getting the timing right is even more problematic and therein lies the challenge: we don’t get to pick the timing of exogenous events.  Business owners who did not follow the counsel they had paid to receive had to endure nearly a decade of struggle to get back to pre-recession levels in most cases.  Many less fortunate businesses failed.  A few slipped through unscathed but still could not monetize because there were simply very few buyers in the market for healthy, thriving companies.  The financial community binged on the carcasses of failed and failing businesses, paying deeply distressed prices.

So I will grant you that my secret isn’t a very good one.  In fact mostpeople wouldn’t technically consider it a secret.  Sometimes the best answers aren’t derived from an artificial intelligence drive algorithm.  Sometimes they come in the form of an email or a phone call from an associate at Vertical Capital Advisors asking, “Have you considered…?”  We have run the algorithms to find your company, we have done our research and there is a reason we are reaching out.

 

 

* * *

At Vertical Capital Advisors, we are most often engaged by industry leaders to be the bridge to the capital they need to fuel growth.  We start with great leaders at great companies that have compelling, profitable business plans where the only missing ingredient is capital.

ABOUT VERTICAL

Vertical Capital Advisors is an Atlanta-area business advisory firm built on creating tangible value for our clients, serving clients in just about every industry.  Our clients are both capital growers and capital allocators.  How can Vertical help your firm maximize value?

Joe Briner
Managing Director
Vertical Capital Advisors LLC
briner@verticalcapitaladvisors.com
866-912-9543 ext 108
678-591-0273

No Deals? Here’s why. (Spoiler Alert: M&A Multiples at Peak)

Our friends in the private equity community tell us daily how hard it is for them to find good, well-priced deals.  Some of them are even straying from their core to seek deals with a “story” (read: problem).  Here’s why:

US M&A

According to PitchBook, the multiples being paid for businesses are at the post-recession peak at 10.8x EBITDA.  Keep in mind that this means many deals traded well over 11x EBITDA.

The current market is the very definition of a seller’s market.

If you successfully navigated your business through the choppy waters of 2008-2012 or if you started an enterprise more recently than that, now is the time to engage with Vertical Capital Advisors to tap into our disciplined approach of preparing your business for sale and obtaining peak value with the fewest conditions.

 

* * *

At Vertical Capital Advisors, we are most often engaged by industry leaders to be the bridge to the capital they need to fuel growth.  We start with great leaders at great companies that have compelling, profitable business plans where the only missing ingredient is capital.

ABOUT VERTICAL

Vertical Capital Advisors is an Atlanta-area business advisory firm built on creating tangible value for our clients, serving clients in just about every industry.  Our clients are both capital growers and capital allocators.  How can Vertical help your firm maximize value?

Joe Briner
Managing Director
Vertical Capital Advisors LLC
briner@verticalcapitaladvisors.com
866-912-9543 ext 108

 

 

Love at First Sight: M&A Activity Continues Slowdown in 1Q2017

S&P’s Capital IQ market intelligence report reveals that the slowdown in M&A activity that started in 2016 continued into the first quarter of 2017 in terms of the number of closed deals (excluding oil & gas and real estate).

transactions by deal size transactions by deal size 2017The dollar value of closed M&A deals managed a slight 2% increase, however:

m and a annual trends

 

We hear private equity groups and other capital allocators bemoan the lack of quality deal flow while we work hard every day to close that gap.

One interesting observation from the inside is that virtually every PEG we interact with that has a presence in Healthcare Services and Financial Services informs us that they are aggressively seeking quality acquisition candidates yet these two sectors show the largest year over year declines:

us manda activity by sector

The schizophrenic market conditions continue.  PEGs want deals yet many have become incredibly fastidious in their analysis of quality deals, bouncing them for reasons that are often difficult to articulate or that ordinarily would not be cause for concern beyond the normal due diligence processes.

We still consider the Healthcare and Financial Services sectors to be in high demand based on our work with capital allocators.  The current love at first sightmarket requires much more marketing than the average deal typically requires.  It has never been easy to place a deal but in the present market, if it is not love at first sight, we are finding that it is requiring two to three times longer to find the right partner and we have to market the deal to four to five times the number of potential partners than we market the typical deal to.

 

 

* * *

At Vertical Capital Advisors, we are most often engaged by industry leaders to be the bridge to the capital they need to fuel growth.  We start with great leaders at great companies that have compelling, profitable business plans where the only missing ingredient is capital.

ABOUT VERTICAL

Vertical Capital Advisors is an Atlanta-area business advisory firm built on creating tangible value for our clients, serving clients in just about every industry.  Our clients are both capital growers and capital allocators.  How can Vertical help your firm maximize value?

Joe Briner
Managing Director
Vertical Capital Advisors LLC
briner@verticalcapitaladvisors.com
866-912-9543 ext 108

 

 

 

 

ACG CapConn – You had To Be There Live

Yesterday was the final day of the annual pilgrimage to Atlanta for over a thousand finance professionals from across the country, all converging for the pinnacle event for professionals focused on helping businesses grow and thrive – the Association for Corporate Growth Capital Connection or ACG CapConn.

#ACGATL
#CapConn2017
https://www.facebook.com/atlantaacg

atl

With over 200 exhibitors plus over 500 other capital providers in attendance, all hungry for equity, mezz and debt deals, David Esmie and I were in heaven for the past three days, starting with the private gatherings on Tuesday followed by two days of intensive networking and working sessions on Wednesday and Thursday.  Here’s a picture of me with long-time friend Gibby Thrift after he won a major award at the Chatham Capital soiree on Tuesday night at Ventana’s:

 

CapComm

 

Our feet were exhausted after three days of non-stop networking but the investment of time and energy was richly rewarded with numerous new relationships with new funding partners eager to see the client projects we are currently working on.

 

 

ABOUT VERTICAL

Vertical Capital Advisors is an Atlanta-area business advisory firm built on creating tangible value for our clients, serving clients in just about every industry.  Our clients are both capital growers and capital allocators.  How can Vertical help your firm maximize value?

 

Joe Briner
Managing Director
Vertical Capital Advisors LLC
briner@verticalcapitaladvisors.com
866-912-9543 ext 108