Benchmark International Logo Blog Mergers and Acquisitions

Archives

2022 Global Space Industry Report

In 2021, the global space market was valued at $388.50 billion and is expected to reach $540.75 billion by 2026. The sector has expanded by an impressive 70% between 2010 and 2020. The space economy is expected to grow at a compound annual growth rate (CAGR) of 6.84% between 2022 and 2026. Analysts also predict that the space industry will reach $1 trillion in annual revenue by the year 2040, with launch costs lowered by 95%. As the cost of accessing space falls, opportunities for expansion and innovation will increase. The fastest growth is predicted to stem from new space applications and industries.

READ MORE >>

The Surge Of Cryptocurrency M&A

Deal activity continues to heat up in the cryptocurrency space as the adoption of crypto becomes more mainstream. Last year was a huge year for cryptocurrencies. In 2021, the price of bitcoin was up 49%, Ether was up 390%, and Dogecoin was up a whopping 1,600%. The M&A market for cryptocurrency soared by nearly 5,000% last year. But this is nothing compared to the activity for M&A of crypto companies.

READ MORE >>

Types of Financial Buyers

There are two types of buyers: strategic buyers and financial buyers. Commercial lenders, family offices, private equity funds, mezzanine funds, independent investors, and other capital providers are all financial buyers. Strategic buyers include everything else. It can be beneficial to entertain both financial and strategic buyers when you are selling your business. Still, it is important to understand how financial buyers think and what you’re dealing with as you work through conversations and negotiations.

READ MORE >>

Why Does Ebitda Get Adjusted?

In the world of small to mid-market mergers and acquisitions, a number that is very important is a company’s adjusted EBITDA. The adjusted EBITDA is meant to find a company’s true normalized earnings by taking away any outside influences or ownership influences on the company’s bottom line. Some companies do not have to make many adjustments in order to find adjusted EBITDA, while some companies may need many adjustments to arrive at adjusted EBITDA.

READ MORE >>

Family Business Succession Planning And Success Rates

A family business is technically defined as an organization that is owned and operated by at least two members of the same family. Family businesses actually account for around two-thirds of all companies worldwide, and 90% of companies in the U.S. The largest 500 family-owned companies generate annual revenues of $6.5 trillion. Global research has also demonstrated that well-run family companies are more profitable and stay in business longer than other companies, even with the many challenges they face. 

READ MORE >>

Aerospace And Defense Sector M&A Update

The financial health of the aerospace and defense (A&D) industry has rebounded significantly from the negative economic COVID-19 impacts of 2020, poising the sector for a strong M&A market in 2022. The earnings of commercial aerospace firms have recovered, and original equipment manufacturers (OEMs) have announced a series of production rate increases for the years 2023 to 2025, raising the likelihood of supply chain acquisition activity in 2022. Additionally, the defense budgets of both the United States and Europe have remained stable, leading to high demand for defense products and services despite some production offsets due to supply chain challenges. 

READ MORE >>

U.S. Small Business Confidence Drops Amid Inflation Concerns

Last month, small business sentiment in the U.S. fell to its lowest level in nearly 9-1/2 years due to concerns surrounding inflation. Yet, at the same time, demand for labor remains more substantial than expected as companies continue to pursue growth.

READ MORE >>

2022 Sector Report: Esports Valued At Over A Billion Dollars

eSports is a form of video-game-based competition that has seen significant revenue and viewership growth in recent years. Much of the revenue is coming from advertising dollars from brands, such as ads shown during live streams on online platforms, video-on-demand content of matches, or on eSports TV. And competitive gaming is becoming more mainstream than ever. 

READ MORE >>

Upcoming Webinar: What You Need To Know About Selling Your Business To A Strategic Buyer

Join us for the complimentary webinar: What You Need To Know About Selling Your Business To A Strategic Buyer.

READ MORE >>

Why Your M&A Strategy Needs A Marketing Strategy

Several elements play into a successful merger or acquisition, from finance to sales and from operations to HR. Leading up to a transaction, it’s not uncommon for business owners to focus more on these elements and not the area of marketing as an essential part of their M&A strategy.

Marketing is an incredibly important part of ensuring the success of a deal and the integration of companies in the agreement. In addition, effective marketing strategies can help the company create value and growth in several capacities.

READ MORE >>

Tracking The Pandemic Recovery Of Retail And Hospitality Sectors

The Retail Industry
Now that we seem to finally be closing in on the end of the COVID-19 pandemic, 2022 is likely to continue to see overall growth in the retail sector, but not without its share of challenges.

READ MORE >>

What Are Environmental, Social, And Governance (ESG) Policies And B Corp Certification?

As a business owner, you may have noticed an increase in conversations regarding environmental, social, and governance (ESG) policies in the workplace and B Corp status. Even though these policies are being implemented more frequently with larger companies, many small and mid-size business owners are not fully aware of what these policies are, what they mean, and how they are affecting investor behavior and M&A transactions. Let’s start by breaking down exactly what ESG is. 

READ MORE >>

What Are The Pros And Cons Of An IPO?

An IPO is an initial public offering (IPO), which is the first limited public stock sale by a private company. IPOs are a strategy often used by smaller businesses to raise capital from public investors in order to facilitate expansion and growth. Once public, the company can be traded on the open market. There are both upsides and downsides to taking a company public. 

READ MORE >>

Top Reasons Business Owners Seek An M&A Strategy

What is an M&A Strategy?
A strategy for a merger or acquisition is the rationale behind the transaction. Your objective should determine the type of deal that is right for your company. Maybe there is even more than one objective. Commonly, these goals are focused on boosting financial performance and mitigating risk.

READ MORE >>

The M&A Process From A Buyer’s Perspective

When it comes to mergers and acquisitions, it is common for a seller to struggle to see the transaction from a buyer’s point of view. This is quite understandable because a business owner spends years, and even decades, building their company into a successful venture. It makes it more difficult to see the transaction from a potential buyer’s perspective. Many M&A transactions fall through because the seller and buyer simply cannot get on the same page. As a seller, you can work with an experienced M&A advisor to help you manage your expectations for the value of your company so that you can not only get the most out of your deal but also make sure the deal goes through. If you’re selling a business, you should understand how the valuation of a company works, what it is based on, and what is important to a buyer.

READ MORE >>

What Is A Sustainable Growth Rate?

As a business owner, it is important to have a solid understanding of what a sustainable growth rate (SGR) is, and why it matters to the valuation of your company. 

READ MORE >>

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.

READ MORE >>

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 

 

READ MORE >>

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%.

READ MORE >>

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.

READ MORE >>

Applying EBITDA Multiples To Your Company Valuation

If you are considering selling your business, you undoubtedly need to understand its value. Unfortunately, arriving at that answer can entail many different methodologies, and it often involves the familiar valuation formula of applying a multiple of Earnings Before Interest, Tax, Depreciation, and Amortization (EBTIDA).

For example, if a company boasts EBITDA of $1 million, and a five times EBITDA multiple is applied, the company’s estimated value is $5 million. But how do we know what multiple applies to your business? And how do we know if the EBITDA number is even accurate? After all, EBITDA will not be the same for every business.

READ MORE >>

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: 
READ MORE >>

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.

READ MORE >>

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. 

READ MORE >>

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. 
READ MORE >>

2022 Professional Services & Management Consulting Industry Report

The Professional Services Market
In 2022, the global professional services market is forecast to grow to $6697.56 billion, up from $6040.91 billion in 2021. That is at a compound annual growth rate (CAGR) of 10.9%. This growth is mainly due to companies’ urgent need to reorganize operations while recovering from the effects of the COVID-19 pandemic, which led to operational challenges because of lockdowns and restrictions. As a result, the global professional services market is forecast to grow at a CAGR of 9.6% to reach $9651.77 billion in 2026. 
READ MORE >>

10 Inspirational Graphics About Retirement

READ MORE >>

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.

READ MORE >>

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.

READ MORE >>

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. 
READ MORE >>

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.

READ MORE >>

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.

READ MORE >>

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. 
 
READ MORE >>

The New Reality and What it Means for Valuation

Is the bull market for privately held companies over? No, that’s not (yet) the reality. But one of the hallmarks of the glorious decade for selling businesses is no more. And unfortunately, many of the acquirers’ gatekeepers weren’t around the last time there was a bull market that looked like this one.

So what is this new normal? Let’s first look at the old normal that we enjoyed from 2010 to 2019 - a nice, slow, smooth macroeconomic recovery. The normalcy of the “teens” allowed small and medium businesses to grow smoothly under ideal conditions. As a result, many businesses experienced near-constant year-over-year growth. And when they’ve failed to do so (or failed to do better), the reasons for the deviation could almost always legitimately be traced directly to some internal event; perhaps the loss of a key salesperson, the launch of a bad enhancement, the lack of ability to pass on an increase in inputs to the customer, or the inability to keep up with a specific competitor.

READ MORE >>

How to Avoid Seller's Remorse

Selling your business can be an emotional experience. You certainly don’t want to be left at the end of the process with a sinking feeling that you have made a bad deal or sold to a buyer who doesn’t appreciate the value and legacy of the company you have built. However, there are things that you can do to avoid seller’s remorse; we will discuss several of them in this article for you to consider.


It’s best to begin putting together an exit plan sooner rather than later. Preparing well for the transition of a business requires time, action, and significant attention. For many business owners, their business represents the majority of their wealth. Planning for the transition allows you to have enough time to minimize taxes, prepare financially for a living situation without the income from the business and put a plan together for the next phase of life. Although typically, entrepreneurs are not the retiring type, knowing what your next move will be can be very important for your state of mind post-sale. Seller’s remorse can often be avoided by beginning to plan for the transaction three to five years before the business owner wants to exit.

READ MORE >>

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).

READ MORE >>

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.

READ MORE >>

Dispelling Myths about Private Equity Buyers

We have all heard the horror stories from lower middle market business owners. Private Equity buyers will come in and get rid of all of my employees, borrow an absurd amount of money to finance the acquisition, thereby straining my company’s balance sheet and income statement, and then, light a match Goodfellas-style when they are done extracting value from it. But, I’ll let you in on a little secret? The days of financially engineering a path to outsized profits are long gone. While there certainly was an era where Private Equity funds looked to lock in a guaranteed “win” by over-levering the balance sheet, stripping the Income Statement of “fat”- read, people- and quickly flipping to monetize the win, those days are largely behind us. Today, most professional buyers value the team in place more so than any perceived competitive advantage with the product or service offering. I’ll say that again, buyers often view the team as the most important determinant of success- more so even than the core product or service offered by the business.

READ MORE >>

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?

READ MORE >>

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. 

READ MORE >>
1 2 3 4 5
... 6 »
Content not found

    Subscribe to Email Updates

    Recent Posts

    Follow Us on Twitter

    Archive

    see all