InSight

Exit and Growth Strategies for Middle Market Businesses

How Do I Know It’s Time to Sell My Company? Part 5

By Robert Contaldo | Feb 06, 2012

Part 5

After selling companies for over thirty years, I have found that it is near impossible to convince a business owner to sell until the business and personal reasons align. But once they do, no good ever comes from delaying a sale. Over the past few weeks, my blog posts have focused on signs it may be time to sell your business… from boredom and a changing market place to risk intolerance. Another good reason to consider selling is a plethora of motivated buyers.

Sign #5 – It’s a Seller’s Market – Always

The three principal buyer groups are Private Equity Groups, strategic acquirers, and high net worth individuals.

Private Equity Groups have become the new conglomerates with overflowing levels of investment capital. With 2,500+ Private Equity Groups in the United States and a like number overseas, competition to buy companies remains robust among financial buyers. Multiple offers can be a reality for even some marginal or smaller companies. Premiums are being paid for companies as demand exceeds supply for those performing well in these tough economic times.

Strategic acquirers see growth through acquisitions as the preferred way to gain market share quickly, add product lines, augment human resources, enhance management, and stay competitive.

Strategic acquirers flush with cash have led the charge to buy companies particularly as banking has tightened for financial buyers.

High net worth individuals and family funds can be worthy suitors. These individuals bring significant personal finances, outside private investment capital, experience, contacts, expertise, and many times a unique investment strategy to the mix.

Perhaps you have been approached by one of these bona fide buyers who is large, cash heavy, willing to pay generously… and inebriated with the desire to own your company. (We can dream can’t we?). This may be a sign it’s time to sell.

 

 

Posted by Bob Contaldo.


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