A world leader in mid-market mergers and acquisitions since 1956.

Is this the right time to sell?

Many business owners who were considering the sale of their business in 2008–2009 have contacted us to ask if now is a good time to reconsider selling. A common theme coming through from these business owners is—“it was a tuff road we just walked down—mentally, physically, emotionally and financially—and I don’t want to do it again”.

We are seeing good signs of the economic recovery for almost 10 months (notwithstanding comments by some about a double dip recession). While there is still some uncertainty in North American markets, for the most part the businesses we visited in the past 6 months have adjusted well to the new reality.

They have trimmed costs and repositioned some product lines / service offerings and, even though there are many instances where top line revenues are still 20% below 2008 levels, most businesses have returned to profitability.

In addition to our experience in the market place (in the past 8 months I have closed 5 transactions), there are also good fundamental reasons to suggest that selling today is a sensible strategy—for example

  • Just as sellers are re-engaging in the market, we are getting an unprecedented number of inquiries from business buyers—both financial and strategic;
  • While I don’t foresee valuation multiples increasing, I do see enterprise values increasing as the cost savings and streamlining that businesses did over the past 2 years find their way to increased profitability, and
  • Buyers are very aware that if a business could survive the events of 2008 and 2009, then the business must have a robust business model and hence a much lower risk of future failure.

It is unlikely that we will see the buying frenzy that we saw in the mid 2000’s, but there is a solid / active market today for those wanting to sell.

If you would like to explore this further, contact me at doug.nix@cfaw.ca