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How Can M&A Help My Business Recover From Covid?

The COVID-19 pandemic taught us quite a few lessons for keeping a business surviving and thriving in unchartered territories. Now is the time to be forward-thinking. There are ways that you, as a business owner, can utilize mergers and acquisitions (M&A) as an effective strategy to accelerate your company’s recovery from the lingering impacts of the pandemic from both a defensive and offensive perspective.

OFFENSE:


Accelerate Your Business Model

Inorganic Growth
Emerging from a pandemic is not the time for organic growth strategies for most businesses. This is especially true for sectors that have experienced irreparable impacts, such as retail, hospitality, tourism, and live entertainment. However, M&A can accelerate growth within a business model is otherwise not feasible or accessible ways. Whether it’s accessing new supply chains or acquiring a competitor’s talent, M&A is an effective tool that can open up several possibilities for growth and success.

Disruptive M&A
Technology and innovation have become more imperative than ever because of the need for rapid digitalization during the pandemic. When remote working and online conferencing became the norm, disruptive tech was put on an epic fast track. Everyone wants what is hot, and they want it ASAP. Otherwise, they risk falling behind the competition. As a result, these technologies offer significant M&A opportunities for companies in many sectors, such as cloud computing and artificial intelligence.

Boosting Supply Chains
Supply chains have taken a significant hit due to the pandemic, with some sectors experiencing worse disruptions than others (such as automotive, energy, and manufacturing). As a result, these sectors are being forced to reboot and find ways to alter their supply chains to get what they need. This is where M&A can be a real game-changer, helping companies gain access to alternative supply chains and keeping operations on track.

Alliances and Joint Ventures
Because of the pandemic, consumer behaviors and spending patterns have changed. Welcome to the new normal. This means that businesses will need to look to new strategic alliances to be more agile in catering to new customer habits, and M&A can help make these joint ventures a reality.

DEFENSE:


Protect Your Future

Integration and Value Creation
Now more than ever, many companies need to cut costs, free up working capital, and do it quickly. M&A is one of the more timely ways to make this happen. Also, planning on ways to create value today can protect your business in the future. By turning to M&A, you can both integrate and develop.

Divestitures and Separations
As economic pressures persist, many businesses need to divest non-essential assets. At the same time, they may also need to unload any highly sought-after assets for financial reasons. There are also opportunities due to sustainable investing becoming much more popular. In addition, environmental, social, and governance (ESG) initiatives lead to rebalancing portfolios, which could mean actionable assets for divestiture. In any case, sellers should enlist professional M&A advisement to ensure that they avoid getting into asset fire sales. Learn more about the value of hiring an M&A advisor here.

End-to-End Distressed M&A
2021 was a record year for M&A, and a great deal of opportunity still exists. Many types of investors, including private equity, activist, and corporate investors, have strong balance sheets. They are sitting on plenty of cash and are in the position to move quickly on acquisitions of distressed businesses.

Let’s Get Started
If you think M&A strategies could benefit your company, our experts at Benchmark International would love to hear from you so that we can discuss your options and help you make the most of your success.

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Eight Truths about The Current Market for Selling Your Business

For more than ten years, business owners have enjoyed a sellers’ market in the lower and middle markets. But the tide is turning. Here’s the headline: Multiples are not trending downward, buyers are slower, more cautious, and cockier, and deals are taking longer. 

 

The best analogy is that we have been on a roller coaster, and we no longer hear the clicking sound as we go up, but we’ve also not started to feel anything in our stomachs. It’s almost as if we are paused, and we feel certain that we know what is coming next. Buyers feel as if they’ve been bullied for the last decade by aspirational sellers and their agents. They have pent-up resentment. Some of it is starting to show. 

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What Is The Difference Between An M&A Advisor And A Business Broker?

When you are about to sell a business, you have a few options regarding how to do it, and whose expertise to enlist. Many people confuse M&A advisors with business brokers. While there are some similarities, they are not one and the same. There is actually more than one significant difference between an M&A advisor and a business broker. It is important for any business owner to understand these differences, so that it can be determined which is the best way to go about the sale of a company.

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Benchmark International’s Gregory Jackson Named International Ceo Of The Year (Corporate Finance)

Gregory Jackson, Benchmark International’s CEO, was named International CEO of the Year (Corporate Finance) by the Gamechangers™ 2022 Global Awards, adding to his growing and impressive list of accolades.

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M&A Trends In The Lower And Middle Markets

In the first quarter of 2022, global middle-market M&A activity maintained the momentum that we saw in 2021. Last year, lower and middle-market companies played major roles in deal-making activity. Companies of all sizes enjoyed significant buyer interest in sectors ranging from tech, transportation, healthcare, manufacturing, and logistics.

 A notable imbalance in supply and demand in the lower and middle markets has been driving up the valuations of healthy companies in hot sectors. This trend is expected to continue through 2022 for strong companies in the lower and middle markets, especially in sectors such as healthcare, cybersecurity, cloud computing, artificial intelligence, and niche manufacturing.

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Seller Handover In A Business Sale

Handover Process

After completing the sale of your business, there is typically a handover process between the seller and the buyer. One of a buyer’s most significant concerns when taking over a business is that the company’s performance continues as it was before the sale. When a seller is willing to stay on for a handover process post-closing, the buyer has increased trust in the business, resulting in the business selling more quickly and at a higher valuation. Therefore, it will be beneficial to both parties to plan this part of the process well and in advance of the time that the handover will take place. The length, compensation, etc., of the Handover period will be worked through during the Purchase Agreement negotiations. If there is a failure to recognize and offer an acceptable handover period for the business, it could cause a deal to fall apart while it is in due diligence.

Ready to explore your exit and growth options?

Stages Of A Business Handover

The typical stages of a business handover are the Training Stage, Handover Stage, and Assistance Stage. Immediately following the sale, the seller will usually continue to run 100% of the business. During this time, the new owner will take some time to familiarize themselves with the business. Then, as the Training stage begins, the seller will slowly reduce their involvement while the buyer continues to increase theirs. In the Training stage, the seller must create a checklist of items that he can run through with the new owner. Mark each item as complete once it’s finished, and keep this for your records if you run into any issues down the road. It is a good idea to observe how a day in the life of your business typically goes. Take note of every payroll task you complete, every person you communicate with, any supplier or contractor documentation, provide copies of all budgets, information about cash flow, etc. Continue with this process until you feel that you have been able to document all of the particulars that the new owner will need to know in order to keep the business operating smoothly. As the seller trains the new owner, the seller will slowly start to reduce their involvement while the buyer continues to increase theirs. This sequence will continue until the complete handover is achieved.

During the Handover stage, the new owner runs 75%-100% of the business with the seller still on hand to help answer questions and ensure that processes are running smoothly. If you have had a successful Training stage, the new owner will have increased confidence in successfully running the business. This may matter to the seller as well, particularly if there are any deferred payments or earnouts that have been agreed to in the structure of the sale. It is imperative to train the buyer and put them in a position to be successful, as both parties benefit from doing so. The new owner will now be in charge of making crucial decisions and bringing innovative ideas and future plans for the business to the table. Customer and employee relationships with the new owner should be solidly in place at this point, and the seller should have very limited involvement in the day-to-day activities of the business.

Once the new owner is running 100% of the business, it is common to enter the Assistance stage, where both parties have made an agreement to remain in contact for a set period of time in case there are any questions that come up. While the seller is no longer directly engaged with the daily runnings of the company, it is best for them to make themselves available to answer any questions that the new owner might have. Many times the majority of this communication can be handled through email and phone conversations. An essential item to have established for this stage is the amount of time the new owner can expect to receive help from the seller, paying particular care to have the expectations and limitations outlined.

A properly planned Handover period can help the seller and the new owner is mentally prepared for the seller’s exit and help prepare the business, customers, and employees for the handover. Once the handover is complete and the seller exits fully, they can know that the business is in good hands. It is time for them to recover from and reflect on the ownership handover period and identify their next goal to get excited about.

 

  Author
  Amy Alonso
  Transaction Director
  Benchmark International

  T: 512 861 3301
  E: Alonso@benchmarkintl.com 

 

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What Is A 338(H)(10) Election And Why It Is Important To Me?

Knowing the structure of a transaction you are involved in is key to optimizing the composition of a deal. If you enter a proposed transaction thinking you understand the offer, you may be blindsided by various structures that may affect your net cash position. A critical aspect of a transaction is understanding the structure and what it means for you as a buyer or seller. Clients often believe that they agree to accept a stock transaction only to find out that the transaction will include an election that may affect their tax bill. A 338(H)(10) election is one of the more popular tax elections, but there are others.

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2022 Food & Beverage Industry Report

The global food & beverage services market is forecast to grow from $3,232.94 billion in 2021 to $3,678.61 billion in 2022. That represents a compound annual growth rate (CAGR) of 13.8%. Growth is primarily due to companies rearranging operations amid recovery from the COVID-19 pandemic that resulted in so many challenges for the industry. By 2026, the market is expected to surge to $5,235.52 billion at a CAGR of 9.2%.

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2022 Fintech Industry Report

The global fintech market was valued at $6.5 trillion in 2021 and is estimated to grow at a compound annual growth rate (CAGR) of 13.9% between 2022 and 2028 to reach $16.65 trillion.

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2022 Digital Healthcare Industry Report

The global overall healthcare industry value is projected to reach $665.37 billion by 2028. Focusing on the global digital healthcare segment of the market, it was valued at $145.57 billion in 2021, and it is expected to reach $430.52 billion by 2028, growing at a compound annual growth rate (CAGR) of 16.9%.
 
The COVID-19 pandemic led to significant shifts in the healthcare sector, as there was an urgent need to adapt and embrace new ways of operating. Many of these changes ushered in the latest in digital healthcare technology and are here to stay. The digital health segment applies software, hardware, and other tech services to the healthcare sector. The space is comprised of categories such as: 
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You Haven’t Missed Out On The Ideal Seller’s Market

2021 was a strong market for business owners looking to sell their companies. The market remains ideal and will do so as we move into the first quarter of 2022. As we are in the middle of this year, there is no better time to consider putting your business on the market.

2021 Recap
M&A activity was moving at a record pace in 2021, thanks to economic recovery, a strong stock market, low-interest rates, rapid digitalization, more SPACs, confident boardrooms, and available debt. The U.S. had reported more than $2 trillion in M&A activity in 2021, with the year on pace to be the most active in history. Not to mention that the second quarter of 2021 was the third straight, with total global M&A value surpassing $1 trillion. That is the first time this has ever happened in three consecutive quarters. So even in the middle of the year, when things typically slow down, we are still seeing a great deal of investment, and the market is still flooded with capital.

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2022 Marketing Consulting, Branding & PR Industry Report

The Global Marketing Consulting Market

The global marketing consulting market is expected to grow by $3.83 billion between 2022 and 2026, increasing at a compound annual growth rate (CAGR) of 4.75%.

Market growth is being driven by various factors, including continued education, the rising need for improved customer digital experiences, and the providing of custom-made solutions.

Because the global marketing consulting market is rather fragmented, we are seeing vendors trying to remain competitive by deploying growth strategies such as forming strategic partnerships. Over the next four years, 35% of the global market’s growth will originate from North America. 

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Benchmark International Named Best Middle Market M&a Specialists

Benchmark International has been named the Best Middle Market M&A Specialists by Corporate Vision’s Corporate Excellence Awards.

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What Are SPACs?

A SPAC  (Special Purpose Acquisition Company) is a company with no business operations that is formed solely to raise capital through an IPO to purchase another existing company. It does not produce any product or service, and it does not sell anything. Although SPACs have exploded in popularity in the past few years, they have been around since the early 1990s. Formerly, they were often seen as a last resort for businesses that couldn’t raise money on open markets. 
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Benchmark International Named International Mid-market Advisory Of The Year (Corporate Finance)

Benchmark International has been named the International Mid-market (Corporate Finance) Advisory of the Year by the Gamechangers™ 2022 Global Awards. 

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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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10 Inspirational Graphics About Retirement

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Benchmark International's Brittney Zoeller Named To 10 Most Inspiring Women Leaders Of 2022

Brittney Zoeller, Benchmark International’s director of marketing, has been named one of the 10 Most Inspiring Women Leaders of 2022 by Industry Era for Women.

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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’s Steven Keane Named Best International Chairman Of The Year, USA

Benchmark International’s Executive Chairman, Steven Keane, has been named the Best International Chairman of the Year, USA by the Global 100 (2022).

In the Global 100 by EMG Publishing, a world-renowned publishing house, each award has a unique, proprietary selection process and ranking method. According to a comprehensive set of criteria, only the most worthy winners are chosen based on their domestic and international work. Judging focuses heavily on the complexity, and strategic significance of work performed, underscoring the importance of the recognition each winner is receiving as an organization or individual.

EMG Publishing is based in the United Kingdom and is known for producing some of the world’s most coveted awards programs that celebrate excellence across the globe. EMG Publishing aims to provide a benchmark of the very best industry leaders, exemplary teams, and distinguished organizations.

Congratulations, Steven!

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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'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 Named Gamechangers™ Progress Champion 2022

Benchmark International continues to draw accolades on the world stage, being awarded the Gamechanger™ Progress Champion Award 2022 by the Gamechangers™ 2022 Global Awards.

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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’s Steven Keane Named Best International Chairman Of The Year, Usa

Benchmark International’s Executive Chairman, Steven Keane, has been named the Best International Chairman of the Year, USA by the Global 100 (2022).

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Questions to Ask Before Selling Your Company

What’s Your Competitive Advantage on the Market?

Consider why prospective buyers would be interested in purchasing your company. You should be able to identify its assets in order to get a proper business valuation. How unique is your product or service offering? Do you outperform the competitors in your sector or in a particular geographic area? You will also want to consider whether your revenues are stable, growing, or declining. If you understand why someone would be interested in purchasing your company, you will be more equipped to enhance those qualities and effectively articulate them to buyers.

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Strategies for Retaining Talent During a Merger or Acquisition

Mergers and acquisitions are effective solutions for growing a company, getting a competitive edge, accessing new resources, lowering risk, tapping into new markets, and acquiring key talent. Obviously, these are all very appealing to investors and upper management. But employees do not always see it this way. 

In actuality, employees often view such a major change as a threat. These negative feelings can lead to employee retention problems, especially in today’s world where labor shortages are already a significant problem. Staff members may feel uncertain about the future of the company, how secure their job may be, how the culture will change, and how a change in leadership will impact them. They can also have their concerns worsened or blown out of proportion if there is not a clear line of communication about what is happening with the company during a transition. Sometimes employees will feel a sense of betrayal. Furthermore, some team members may feel guilty if they keep their jobs while coworkers are victims of downsizing or restructuring. Combine all these factors and quickly end up with people looking for work elsewhere. But that is not good for any deal. Why?

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Benchmark International's Brittney Zoeller Named To 10 Most Inspiring Women Leaders Of 2022

Brittney Zoeller, Benchmark International’s director of marketing, has been named one of the 10 Most Inspiring Women Leaders of 2022 by Industry Era for Women.

Brittney brings a unique mix of talent and strategic insight to the table for Benchmark and our clients. She applies her creative vision, design and user experience, and technological savvy to create exceptional interaction experiences every day, spearheading all marketing initiatives and leading a team of cross-disciplined marketers.

Gregory Jackson, CEO of Benchmark, weighed in on her award, saying, “Brittney is a true force to be reckoned with. She is a kind, creative, and highly driven leader who knows how to motivate others and whose positivity and optimism are infectious throughout our organization. She inspires us all.”

Industry Era for Women is a digital publication that features CEOs, C-suite executives, and other industry pioneers. It serves as a forum for C-level executives to share their experiences in order to support and inspire others to achieve goals and stay competitive. It also serves as a platform for executives to discuss trends, decision-making processes, and leadership in sales, marketing, and productivity, as well as positive retention of staff.

Brittney has received several awards with Benchmark International, including a Silver ADDY for the Benchmark rebranding and logo design, and a Gold ADDY for the design of THE MARK, Benchmark’s magazine publication. She was also recognized in New York City as an “Extraordinary Leading Woman” by the Direct Marketing News.

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What is The Outlook For Capital Markets in 2022?

Capital markets drive capital to areas of innovation and positive growth, creating jobs and fueling economies. In the US, capital markets fund 73% of all economic activity. This takes the form of equity and debt financing of non-financial companies. Capital markets facilitate debt issuance, which tends to be a less restrictive form of borrowing for businesses. The usage of debt capital is the most prevalent in the US (80%), versus other regions (only 20–30%) where bank lending is more prevalent. 

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Benchmark International Successfully Facilitated the Transaction Between K.L. Durham Construction, DBA Performance Equipment Service and Mid-State Restoration, Inc.

Benchmark International’s K.L. Durham Construction, dba Performance Equipment Service, a San Antonio, Texas-based company that is a leader in the provision of soil stabilization and milling support services to contractors with projects in Texas, has successfully sold to Mid-State Restoration headquartered in Lakeville, Minnesota.

Ready to explore your exit and growth options?

Performance Equipment Service serves contractors across the state of Texas, specializing in highways and city and county roads and projects for airport runways, automotive tire test tracks, and private work. The company has well over a decade of business under its belt and has emerged as the go-to contractor for milling and soil stabilization.

Midstate Companies has consistently evolved and expanded to become the industry leader in cutting-edge pavement recycling. The company provides quality transportation and pavement recycling services to its customers through environmentally safe practices. Midstate has always used cutting-edge technology/equipment coupled with industry-leading personnel to make their specialized services look easy.

Benchmark International proved value in finding a buyer with experience in the industry through its proprietary multi-medium marketing strategies. In addition, Benchmark International incorporated several campaigns with local, regional, and national associations.

Transaction Director, Amy Alonso, commented, “We understood that our client was seeking an acquirer that would provide a succession plan for the company and take care of the employees. We are excited to see that our client’s business will carry on and prosper as a result of this transaction. On behalf of Benchmark International, we wish both companies continued success.”

 

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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Mortgage Brokerage Industry Report

The Global Market

The onset of the COVID-19 pandemic rattled the worldwide mortgage market. New lending volumes plummeted to record lows amid declining consumer sentiment, job losses, and nationwide lockdowns in many countries. However, new mortgage lending has remained on an upward trajectory since the second half of 2020. The total number of closed-end mortgage originations jumped from 8.3 million in 2019 to 13.6 million in 2020. That’s an increase of 65.2%. Regulators have kept interest rates at an all-time low. Even though interest rates could begin to tick up at some point, globally, the mortgage brokerage services market is expected to continue to see tremendous growth through the year 2027.

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Why Should I Sell My Company?

As the owner of a business, you face a slew of tough decisions nearly every day. One question you may have asked yourself is whether you should sell your company. Several factors can influence your decision to sell, some of which you may not have even thought about. Here you will find a comprehensive list of possible reasons to help you decide if and when selling your business is right for you.  

It's at a High Point

Over time, most businesses face different cycles of highs and lows, and potential buyers prefer to acquire companies that are thriving and have a positive future outlook. When your company is performing well, and profits are high, you can opt to sell to get the maximum value in a sale. You may not be ready to retire or move on, but if you sell at the right time, you can make the most money possible and pave the way for a more secure financial future. This can also help you avoid selling at a later date for less value, which would mean less money for your retirement. 

If you are far from being ready to retire, there are ways to structure a deal to stay on with the company, working for the new owner and helping them grow the business. This can help you start the transition to your full exit. And in this case, if the business declines or an economic recession occurs, you do not face the risk of losing value because you got out at the right time.

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How a Partial Sale of Your Business Can Benefit You

There are strategies available for business owners who are in need of additional capital to grow their business. The partial sale transaction has gained popularity over the last couple of years. When business owners find themselves with limited operating liquidity, they are unable to create the type of growth they desire. A partial sale can bring additional resources into the business that can set into motion long-term growth strategies, increase operational stability and recruit new hires. If you are looking to downsize your company, you can invest that money into different opportunities that may offer you a higher return on your investment.

A partial sale of your business gives you the opportunity to remain involved in the business that you have spent decades building. Following a partial sale, many business owners serve as advisors, senior executives, board members, etc., to assist the buyer with their transition period to new ownership. Smart buyers are open to customizing the role and involvement of the seller once the deal has closed in order that the seller remains with the business for months and years to come.

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Benchmark International’s Marketing Team Wins Another Addy Award

At the American Advertising Awards, Benchmark International's marketing team won another ADDY® award for their "Virtual Black Box" in the Microsite category. A microsite is any web page or series of pages that are a part of a larger website but intended to feature specialized information. 

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Financial Services Industry Report

Financial Planning & Advisory Sector

In 2022, the market size of the financial planning & advisory industry is $59.2 billion. It is expected to increase 4% this year. Between 2017 and 2022, the market has grown 4.5% per year on average. The size of the market has increased faster in the U.S. than the overall economy. 

Industry profit declined in 2020 due to declining assets under management and lower return on assets but increased in 2021 as the economy began to recover. As macroeconomic conditions continue to improve through 2026 gradually, industry operators are expected to benefit from rising equity values and rising interest rates. 

High competition is a challenge in the industry, while the population's median age represents an opportunity. This is because the rising median age of the U.S. population is approaching retirement age, which increases the demand for retirement planning, capital preservation, and estate planning.

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The Increasing Adoption Of Enterprise Resource Planning And Customer Relationship Management Software

Due to the COVID-19 pandemic, there has been increased adoption of enterprise resource planning (ERP), customer relationship management (CRM), and other entrepreneurial software. In 2020, many companies accelerated their plans to begin using these systems, and the market for them remains hot, particularly for Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) models. COVID forced most businesses to digitize their offerings in real-time as consumers began turning to online shopping and employees started working remotely—both trends that are expected to continue into the future.

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The Shift From a Seller's Market To a Buyer's Market When Interest Rates Rise

So if you are a business owner considering selling your company, the good news is that right now, it's a seller's M&A market. By October of 2021, total M&A deal activity reached $4.4 trillion, which is an increase of 92% compared to a year ago and is the strongest opening period for M&A since 1980. In addition, merger activity resulted in deals totaling $1.52 trillion in the three months prior to September 27, 2021. That's up 38% from the same quarter in 2020—and more than any other quarter on record.

In a seller's market, demand is high for assets that are in limited supply, giving sellers more pricing and negotiating power. This demand can be attributed to a recovering economy, high cash balances, big government spending, new SPAC buyers, and low-interest rates. Plus, investors are flush with cash and ready to spend it on acquisitions that can help create growth or add capabilities. When market conditions shift, buyers have the upper hand in deal negotiations. And this could happen when the U.S. Federal Reserve increases interest rates in the next year or so.

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What Does Inflation Mean For Your Ability to Sell Your Business?

Short answer – We don’t know. The M&A market has never interacted with this much inflation before. Inflation is now at a 40-year high. In 1982, there was no M&A market. The birth of the market is most often traced to KKR’s 1988 takeover of RJR Nabisco, as made famous in the 1989 book “Barbarians at the Gate” and the 1993 movie of the same name. Whether that is the actual date of birth or not can be argued. Still, at the time it was commonly thought that the cash for the $25 billion price tag was unattainable because, as the book says, there was a belief that there was not anywhere near that much excess cash floating around for doing deals in the entire world.

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The Impact of Labor Shortages on M&A

The Labor Shortage Persists

The COVID-19 pandemic has impacted companies of all sizes, but small businesses have certainly been hit the hardest. First, there were total shutdowns, followed by financing problems due to slowed business, and now it is labor shortages that are the latest issue as the world works towards recovery. 

The slew of workers leaving the workforce altogether is fueling a growing labor shortage in what seems to be every industry. Demand is up, and supply is down. Businesses are facing concerns with not having enough people to get the job done—especially in sectors such as healthcare and technology. These spaces are seeing attrition rates of 3.6% and 4.5% higher, respectively, than last year. Research even shows that 36% of workers who quit their jobs did so without another job lined up.

And the labor shortage is an issue that is happening on a global scale, from the US to Canada to Europe. According to the US Census Bureau, many businesses struggle to retain and attract employees, and 49% of business owners say the labor shortage is affecting their business. And a Canadian study reported that 30% of Canadian business owners say the top motivating factor for pursuing an acquisition is gaining access to new talent. That number is up from 20% before the pandemic. Additionally, a recent Eurostat survey found that, in the third quarter of 2021, a worker shortage was hampering production at 83% of industrial companies in Hungary, 50% in Poland, and 44% in the Czech Republic.

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