A Discerning Firm's Guide to the Buyers' Market

Got mail? We are all seeing a flurry of selling sheets coming from brokers trying to create M&A matches. Why?


Practitioners are accelerating their search for successors, and there is an increasing number of practitioners ready to exit and retire. Some say it is a buyers’ market. It certainly is an active market. But, while firms may be in play, many are still just window shopping. How does a discerning firm sort through the clutter?


Below are some pluses and minuses to consider during this kind of active M&A market.


Pluses:

  1. The strong volume of firms in play attracts new and different successors/acquirers.

  2. Firms are learning from the exploratory process what it takes to get a deal done and some best practices that will improve their firms.

  3. Firms not ready to transact are building relationships which will generate business opportunities to refer and share work.

  4. Deals are becoming more creative and incentives are creating better results for all the parties.

  5. Opportunities to promote to partner are more realistic due to acquiring more business.

Minuses:

  1. Deals that have merit are not getting done because parties are not in sync on pricing and values.

  2. Too much time is going into meetings and processes for candidates that are not ready.

  3. Too many people are entering discussions out of fear that the opportunity will be lost.

  4. Partners and staff are being provoked by the conversations—and the unrest fuels turnover.

  5. Too many sellers try to be what they aren’t to gain an advantage. Too many buyers are seeing the seller as a bargain especially as they are packaged, when they aren’t a bargain.

Market conditions will always bring positives and negatives. However, discerning and successful deal-makers will study the market and understand how the pluses and minuses will impact their goals.


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