08 Nov Around the Web: A Week in Summary
A recent article posted on The Axial Forum entitled “Capital Superabundance is Transforming Middle-Market M&A” explores the effect that the abundance of cheap capital is having on middle-market transactions. This “capital superabundance” is having effects across the middle-market sector among private equity firms, corporate buyers, investment bankers, and middle market companies alike. Brand value is more important than ever in the eyes of private equity companies and corporate buyers, investment bankers are using data and advanced technological systems to find clients, and for sellers, there has never been a better time to sell a business.
The fact of the matter is the market is hot right now. Though capital superabundance is just one of many varying parts of this market change, it is a driving factor behind much of the success we’re seeing.
A recent article from Divestopedia.com entitled “5 Essential Steps to Ensure Due Diligence in Private Company Acquisitions” explains the necessity of due-diligence during the acquisition process. Due diligence cannot be stressed enough and the fact that it is always popping up just shows its importance and relevance to a successful deal process. The following steps outline critical components of completing due diligence for an acquiring company:
- Construct an Investment Thesis
- Analyze Your Competitive Position
- Measure the Strength and Stability of the Acquired Company
- Revenue Synergy
While this is not an exhaustive list, the aforementioned steps outline an important process necessary for any acquirer to ensure they are best prepared for a successful acquisition.
A recent article posted on The Axial Forum entitled “Reviewing 2017: An Expert’s View on Middle Market Activity” gives an overview of middle market activity through the first three quarters of 2017. While the year isn’t over and there’s still much more data to come in, it seems that 2017 will surpass 2016 in terms of deal flow, with things like valuation producing sometimes higher multiples (though these are strictly industry-specific).
The fourth quarter typically sees an increase in closed deals, so judgement is still out on the year as a whole, but considering how the last three quarters have panned out, it’s looking like 2017 will again be a solid year for middle market activity.