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I missed the market!

We have been in an unprecedented bull market. I use the phrase here broadly as the public markets have been flying for over a decade, and the M&A market has seen similar levels of growth. Spurred on by aggressive monetary and fiscal policies and a relaxed regulatory environment, the S&P 500 has grown 15.47% as of the time of this writing from the bottom on March 9, 2009. Similarly, the DJIA (The Dow 30) has grown at an annual clip of 13.64% over the course of this thirteen-year bull market. Remember what the rule of 72 demonstrates- that money doubles every 6 years at 12% and in less than five years at 15%. This is a remarkable rate of growth when you consider this market has spanned nearly 1/7th of a century.

Ready to explore your exit and growth options?

But bull markets must end. Markets do work in cycles. Much like our natural habitats require destructive fires to seed future growth and a healthy ecosystem, so too does the market. I’m not referencing the concrete jungles we find ourselves in today, but rather our natural environments. Bear markets reintroduce a rational approach to investing that had long been sidelined in favor of momentum and emotion-based investment “theses."

 

Further, bear markets tend to focus investments toward the highest quality of companies, known as a flight to quality. This clearing of the playing field, separating the wheat from the chaff, will often spur innovation and future growth. So a bear market is as natural to the market dynamic as is a bull market. These countervailing forces are required for regeneration.

 

The bull market created trillions of dollars of dry powder for buyers to deploy in the coming years. The balance sheets of corporations, large and small, are replete with cash there to deploy in pursuit of their stated strategic goals. The best of markets tends to flood the M&A market with excess buyers, many of which lack the track record, experience, credibility, and true access to funding required to transact successfully. Bear markets tend to weed away many of these less credible buyers creating a similar flight to quality detailed in the above discussion about the public markets. And while the cost of debt will tick up and valuations may similarly tick down, the likelihood of actually consummating a transaction increase as there is a much better chance that the buyer selected can get a deal done.

 

I tend to view my decisions in life through a very specific lens- my expected value lens. If one were to look at an M&A transaction through that lens, we would likely find the expected value of the proceeds from a transaction as being higher, even if valuations tick down, because the likelihood of closing is greatly increased.   And frankly, while the cost of capital on senior debt will rise over the course of the year, given the aforementioned stores of cash in their coffers, buyers will have the ability to utilize more equity to bridge any gaps in the capital stack. Private Equity funds have more than $2 Trillion of dry power. They also have a mandate to put capital to work regardless of the cost of debt lest they face aggressive headwinds during their next fund raise. Their Limited Partners, known as LPs, require that they put the money to work. Deals will continue to happen and we may in fact see more deals in the next eighteen months or more as buyers finally draw down on the excess stores of cash build-up that resulted from inflated valuations and bidding wars with less credible buyers.

 

Sellers must consider several factors when considering a sale. Of course, valuation and a healthy economic environment are among those factors but they don't have to be the determining one. We are often faced with life changes of which we have no control. Some of us simply reach a stage where we no longer wish to carry the burden that invariably comes with owning and running a business. Or, God forbid, we encounter health challenges personally or in our family that requires that we focus our attention elsewhere. Perhaps we come to the realization that we are no longer the right caretaker for the business? That the business has reached a level where our skills no longer map to what is required to successfully steer. Whatever the reason to sell your company, we can only control the controllables.

 

Just like in the public markets, if we try to time it perfectly, we will invariably fail because the objective was unattainable. Selling one's business is a life-altering decision. Selling a business can be both liberating and gutting. Sellers are at once monetizing their life's work and entrusting someone else with its care. The stakes are high. When making that determination, it is critical that sellers consider all of the critical variables. While valuation, market conditions and timing are among the variables worthy of consideration, they are merely inputs to a multivariate equation. Often, upon careful consideration, sellers determine that the qualitative elements are more important than are the quantitative ones.

 

  Author
  Dara Shareef
  Managing Partner
  Benchmark International

  T: 813 898 2350
  E: Shareef@benchmarkintl.com 

 

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What’s The Difference Between Recurring And Repeat Revenue?

If you are considering selling your business, you will need to have a clear understanding of its type of customer revenue because it can significantly impact the value of your business. Sometimes people confuse recurring revenue with repeat revenue, but it is essential to understand how they are not the same thing.

Recurring Revenue
Recurring revenue stems from a contractually bound legal agreement for a solution delivered over time. It is usually contractual over one or multiple years, and because it may carry penalties or fees if the customer leaves, it can be counted on into the future. This makes it highly valued by prospective acquirers because of its predictability and lower risk.

However, recurring revenue does not have to be contractual to be valuable. Depending on the business and the services offered, it can be too costly or too much of a hassle for a customer to leave or switch providers. An excellent example of this is customer relationship marketing companies that collect large amounts of valued data over time, making it more beneficial for clients to stick with their services. Below is a list of the different types of recurring revenue.

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Benchmark International Unveils its New Düsseldorf Office

Benchmark International is delighted to announce it has officially opened its new offices in Germany.

Taking residence on the eighth floor of the Sky Office in Düsseldorf, the large and modern offices opened in 2009. With an aesthetically pleasing design both inside and out, the building creates an inspiring working environment in a first-class location.

In close proximity to Düsseldorf International Airport and near the city centre of Düsseldorf, the building is very well positioned from a logistical standpoint.

A perfect fit for Benchmark International, the Sky Office will be a great representation of the Benchmark brand in Germany.

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Benchmark International Successfully Facilitated the Transaction Between ARC Abatement Holding Inc and West Fork IP, LLC

Posted on April 21, 2022 By in Deal completions

Benchmark International successfully facilitated the transaction of a collection of four Texas-based companies that provide a range of services, including hazardous material abatement, environmental consulting, and training for private and public clients across the United States.

Ready to explore your exit and growth options?

The four operational entities include ARC Abatement, Inc. and ARC Abatement I, Ltd, ARC Industrial Services, LLC, and Asbestos Consulting Services, Inc. The four non-operational entities include ARC O&G Services, LLC, C&C Coating, Inc., ARC Roofing, LLC, and ARC Allied Ventures, LLC.

Fernandez Holdings, acting for West Fork IP, LLC, is an investment firm with a diverse portfolio of businesses operating in multiple industries throughout the United States.

“This was a deal that got a lot of attention, and we engaged with several interested buyers, which required the facilitation of productive conversation between buyers and seller. It was an honor to work with them toward our collective goal of finding a cultural fit and completing the deal. We wish both parties the best with the handover,” said Brenda Spencer, Transaction Director.

Schedule A Call

 

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com 

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

Website: http://www.benchmarkintl.com
Blog: http://blog.benchmarkcorporate.com

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Benchmark International Successfully Facilitated the Transaction Between VAI Architects Incorporated and HED

Benchmark International successfully facilitated the transaction of an award-winning, Dallas-based architectural firm offering a wide range of planning and design services.

Ready to explore your exit and growth options?

'VAI Architects Incorporated (VAI) primarily works on public infrastructure projects for the transportation, government, education, healthcare, and religious sectors. With over 35 years of experience in the greater Dallas-Ft. Worth area, the VAI team has established trust among clients by consistently delivering excellence through collaborative design innovation and dedication to client service.

"VAI has always been dedicated to client service and committed to the Dallas community, and since our founding, we’ve emphasized learning and collaboration in our company culture — values we share with HED,” said VAI Co-Founder William Vidaud de la Vega. “Those shared values and commitments are strengthened by joining forces through the merger, and we look forward to working as part of the HED team to continue creating a positive impact for clients in Dallas and the surrounding area.”

Known nationally for the top-quality architecture and engineering services delivered by the firm’s expansive array of professionals, HED creates innovative and sustainable design solutions for clients in the healthcare, higher education, housing, manufacturing, and product development, mission-critical, mixed-use, preK-12, science, and workplace sectors.

“Our strategic merger with VAI is a great fit because of our shared commitment to creating a positive impact for clients and the greater community while providing growth opportunities for our talented staff,” said Peter Devereaux, FAIA, Chairman and CEO of HED. “We are pleased to welcome the VAI team into the HED family and look forward to using our combined strength to explore new opportunities and fulfill our common commitment to ensuring long-term success for our clients.”

“Benchmark was honored to work with VAI and HED through this strategic merger,” said Brenda Spencer, Transaction Director for Benchmark International. “Their shared commitment to their staff, projects, and communities were early indicators of a good fit. We wish them well in the transition and in their future endeavors.”

 

Schedule A Call

 

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com 

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

Website: http://www.benchmarkintl.com
Blog: http://blog.benchmarkcorporate.com

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Benchmark International Successfully Facilitated the Transaction Between RS Equipment Company LLC, DBA Hotsy Carlson Equipment Company, and Texas Enterpries, Inc.

Benchmark International successfully facilitated the transaction of an industrial cleaning equipment sales, rental, and service company. The company serves customers in various sectors, including education, transportation, manufacturing, construction, food processing, agriculture, oil and gas, municipal, retail, restaurants, and contract cleaning.

Ready to explore your exit and growth options?

RS Equipment Company, Hotsy Carlson sells and rents industrial cleaning equipment and services primarily to the Central Texas market as well as nationwide. These products include over 900 models of industrial pressure washers and customized detergents. Services include tech servicing, parts sales, and scheduled maintenance.

Founded in 1921, Texas Enterprises, Inc (TEI) is a fifth-generation family-owned and operated company. TEI distributes petroleum and lubricant products with offices across ten locations in Texas and New Mexico. Texas Enterprises, Inc is currently led by Ford Smith Jr. and is headquartered in Austin, Texas. With over 250 employees, TEI constantly strives to deliver the best possible products and services to their many customers.

''RS Equipment LLC is a well-established company experiencing substantial growth. There were many interested buyers, but none compared to the cultural fit they found with TEI. Their mutual appreciation was evident from the first point of contact and both sides worked well together. We wish them all the best in the transition and their future endeavors."
- Brenda Spencer, Transaction Director

 

Schedule A Call

 

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com 

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

Website: http://www.benchmarkintl.com
Blog: http://blog.benchmarkcorporate.com

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Benchmark International Successfully Facilitated the Transaction Between Yakgear, Inc and T-H Marine Supplies, LLC, and Nautical Group International Holdings Limited

Benchmark International successfully facilitated the transaction of a distributor of paddle sports accessories and marine accessories. based in Houston, Texas, the company also has operating agreements to provide RAILBLAZA products throughout North America, as well as distribution agreements with several other third-party water sports brands.

Ready to explore your exit and growth options?

YakGear is an industry-leading supplier of kayak equipment, paddle sports accessories, and boat-mounting accessories to individual consumers, as well as distributors across the United States via e-commerce and retail sales. The company has several partnerships with big-box retailers, distribution outlets, and e-commerce channels such as Amazon to market and reach a wide audience.

“I wanted to take the time to thank [Benchmark International] for all the hard work y’all did to make selling the company an easy thing. From the early beginning of the adventure, I knew I had someone to rely on and count on for conversation and guidance. It was a long road, over two years, but you brought many competent buyers to the table, it was just me looking for the right one to continue the tradition my team, and I had built into YakGear for 17 years.” -Bill Bragman Founder of YakGear Inc.

Nautical Group Holdings (NGH) acquired all assets of YakGear that relate to RAILBLAZA distribution, including associated stock and direct-to-consumer (DTC) accounts. RAILBLAZA USA Inc. (RAILBLAZA USA) will operate as a 100% owned subsidiary of NGH from Houston, Texas, managing all RAILBLAZA operations and sales distribution to the North American market.

NGH aims to achieve a dominant market position for each of its niche portfolio brands while accelerating an innovation focus with speed to market while assisting portfolio companies to build out governance and corporate functions to a higher level of maturity to support growth. It will capitalize on a broad range of well-developed relationships with global distributors, partners, and customers, supplying best-in-class solutions.

Commenting on the transaction, CEO of NGH, Marc Michel, said, “Our thanks to the YakGear team who have done an amazing job of establishing and growing RAILBLAZA in the US market. This is a strategic acquisition to accelerate our momentum in the US market and put in place a focused RAILBLAZA team.”

The remaining assets of YakGear have been acquired by TH Marine, a division of OneWater (NASDAQ: ONEW). T-H Marine has grown to be one
of the largest suppliers of marine parts and accessories in the United States. T-H Marine is based in Huntsville, Alabama, where it provides various products, including jack plates, outboard tilt and trim controls, rigging components, boat plumbing, hatches, LED lights, live well aeration, and more.

“Since 2006, YakGear Founder and President Bill Bragman and his team have done a remarkable job providing accessories to kayak, canoe, and stand up paddleboard enthusiasts, earning YakGear’s reputation as a household name among their audience,” said Jeff Huntley Sr., Chief Executive Officer for T-H Marine. “We’re thrilled to add the YakGear team, including Jerron Wosel, YakGear’s Director of Procurement and now President of the YakGear division, to T-H Marine, along with their expansive portfolio of paddle sport products. YakGear’s strong multi-channel approach to the aftermarket complements our platform and provides exposure to an entirely new set of paddle sports retailers and consumers, giving T-H Marine a stronger foothold in the space.”

“Representing an industry leader like YakGear was an honor for our team and are confident the acquiring parties will continue to grow within their niche and benefit by this transaction.” Brenda Spencer, Transaction Director said, “we wish success to all in their future endeavors”.

 

Schedule A Call

 

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com 

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

Website: http://www.benchmarkintl.com
Blog: http://blog.benchmarkcorporate.com

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The Pros & Cons Of Buying An Established Franchise

The franchise business model can offer a great way to own your own business without the risks that are proven to come with start-ups. But owning an existing franchise can undoubtedly come with its share of challenges. So before jumping into a franchise ownership, be sure to consider all the good and bad that you could face before deciding if it’s the right opportunity for you. 
 
The Pros 
 
An existing franchise comes with a history that you can use to assess its financial data to know whether it is a good business. In addition, you can see all the books to make your determination of possible future performance. 
 
It can be easier to obtain financing for a business with an existing history of financial performance because lenders have something concrete to go by and, therefore, more confidence. 
 
You get to skip the time-consuming start-up phases of owning a business, such as creating a business plan, creating a product, doing market research and testing, and figuring out how to scale. With a franchise, this work has already been done for you. Next, you have to make sure it succeeds. 
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Benchmark International Successfully Facilitated the Transaction Between Fuse Rail Limited and John Sisk & Son Ltd

Benchmark International is pleased to announce the acquisition of Kent-based Fuse Rail by international construction and civil engineering group, John Sisk & Son (Sisk Rail).

Fuse Rail services electrification and plant requirements within the rail industry. Working on behalf of Network Rail, recent projects have included a new electric distribution cable at a supply cable in Lydden, installation of a new conductor rail on the Sevenoaks tunnel refurbishment, and new reactive DC cabling for the Eastbourne substation.

With a 160-year history, Sisk Rail is an international construction and civil engineering business undertaking structural remediation, buildings refurbishment, mechanical and electrical planned maintenance, litter clearance, earthworks, fencing, drainage clearance and repairs on behalf of Network Rail and other train operating companies. The company has offices throughout Ireland, the UK and mainland Europe, specifically the Benelux, DACH and Nordic regions.

Ready to explore your exit and growth options?

The acquired company will continue to operate under its current branding and management team.

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Benchmark International Ranked in Mergermarket’s Global League Tables Q1 2022

Benchmark International is pleased to announce that it has been ranked in the top 10 by Mergermarket for the number of deals it has conducted in Ireland.

Bank of America, PwC and JPMorgan are amongst the companies to also rank in the top 10.

An Acuris company, Mergermarket delivers M&A intelligence, data and research. To qualify in its league tables, transactions must be over 5m USD in value and publicly available.

Looking for a Corporate Finance Adviser? 

James Thornton, COO at Benchmark International, commented: “We are delighted to have been ranked in Mergermarket’s Global & Regional League Tables for the first quarter of 2022. To be ranked in these league tables is further acknowledgement of the hard work and effort our teams put into every transaction.

“Having only established an office in Ireland less than five years ago, it is great to see that we are growing our footprint and have established ourselves as a distinguished institution in this location by conducting a number of deals over 5m USD, competing with M&A industry giants.

“Over the course of the last year, Benchmark International has expanded its international reach further, establishing an office in Germany, and I’m looking forward to seeing what our new team will achieve, and seeing Benchmark International on the German league tables as well very soon!”

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Benchmark International's Kendall Stafford Wins "Top USA Woman Deal Maker Award"

Benchmark International’s own Kendall Stafford has won the Top USA Woman Deal Maker Award from the 4th Annual USA Growth Intelligence Forum and the USA M&A Atlas Awards.

The award singularly honors the A-list of the most talented, respected, and brilliant women dealmakers from private equity, venture capital, investment banks, legal, and restructuring transactional communities. It is officially “award winner recognition,” unlike industry lists, rankings, editorial praise, or write-ups.

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Benchmark International Successfully Facilitated the Transaction Between Real Regulatory Limited and Transcrip Partners LLP

Benchmark International is pleased to announce the acquisition of Dublin-based Real Regulatory by private equity-backed tranScrip.

Real Regulatory is a consultancy firm specialising in European regulatory affairs, quality systems and compliance for products including medicines, medical devices, and drug device combinations. Headquartered in Dublin, the company also has offices in Cambridgeshire and Malta.

Founder and managing director, Karen Real, who has more than 35 years’ experience in the pharmaceutical industry, will remain with the business moving forward.

tranScrip is a fast-growing contract drug development organisation which supports the development and lifecycle of medicines. It is backed by private equity firm, Palatine, and the deal is the first acquisition made by the company since securing Palatine’s investment in 2021 via its dedicated Impact Fund.

Ready to explore your exit and growth options?

The strategic acquisition significantly expands tranScrip’s regulatory affairs capabilities, strengthening its ability to provide comprehensive support to its customers.

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Growing Opportunities In Remote And Cloud-based Businesses Post-covid

Digital tools have been advancing in business operations for years, but today they have become essential for most companies, especially since the onset of the COVID-19 pandemic. The global crisis forced businesses to find ways to connect their employees to each other and their customers without being in person. This storyline became so prevalent that, in the first year of the pandemic, 60% of businesses moved their workforces to the cloud. Two years later, this number continues to increase.

Such demand for rapid digitalization has become a key driver of M&A deals, and continues to create more opportunities for growth and transactions. As a result, many organizations are also adopting tools to facilitate the M&A process on more digital terms. These tools include data and analytics during due diligence, platforms that support fast-moving transactions, and cloud-based services. You can take a deeper dive into the facets of post-COVID due diligence here.

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2022 Real Estate Industry Report

The COVID-19 pandemic impacted nearly every industry in some way, but real estate underwent its own very unique transformation. Many office buildings have sat empty and seem almost obsolete while most workplaces shifted to work-from-home models, and many plan to stay that way or create hybrid workforce plans. Throw in the global supply chain issues, labor shortages, and inflation, and there are certainly economic risks for the sector. But the economy has steadily been recovering while the most serious times of the pandemic appear to be subsiding. 
 
GDP in the United States has fully bounced back from the 2020 pandemic-induced recession. This is good news for the real estate sector’s recovery. Coupled with low interest rates, strong economic growth will be very encouraging for commercial real estate. GDP is expected to grow by a strong 4.6% in 2022. 
 
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Benchmark International Successfully Facilitated the Transaction of O’Flynn Medical Limited and O’Flynn Innovation Limited to Healthcare 21 Ltd

Benchmark International has advised on the transaction of Irish headquartered O’Flynn Medical and O’Flynn Innovation, to Healthcare 21. O’Flynn will become part of the Healthcare 21 Group, which AddLife acquired in 2021.

Established in 2000, O’Flynn Medical is a leading provider of medical equipment and PPE to Ireland’s care home and domestic markets offering the sale, rental, and associated services and maintenance for a range of specialised products.

O’Flynn Innovation was later established in 2011 for the distribution of automated garment dispensing control systems. Together, the group has become a trusted distributor of medical equipment to the care home and domestic markets.

Established in 2003, Healthcare 21 is an independent medical device distributor offering sales, marketing and technical solutions for many of the world’s leading healthcare equipment manufacturers. The group has an annual revenue exceeding €159 million and more than 450 employees across four European countries.

The acquisition provides Healthcare 21 with the opportunity to expand its portfolio into the rental market segment, to become the leading provider in Ireland. The acquisition also provides entry for Healthcare 21 into the bariatric market segment.

Do you have an exit or growth strategy in place?

O’Flynn Medical will continue to trade under its existing name and remain headquartered in Macroom, Cork.

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Benchmark International Successfully Facilitated the Transaction Between Velopi Limited and Educate 360, LLC

Benchmark International is pleased to announce the acquisition of County Cork-based Velopi by Boston-based Educate 360.

Established in 2007 and headquartered in Kinsale, Ireland, Velopi provides training and consultancy services, specialising in the niche of project management. The firm has a list of renowned clients that includes Abbott and Pfizer.

Ready to explore your exit and growth options?

Educate 360 is a professional training partner that designs training, coaching, and consulting solutions to improve efficiency, increase cross-functional alignment, and drive results. The acquisition enables Educate 360 to have a greater reach into the European market and the ability to build upon Velopi’s existing clientele.

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