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2020 Automotive M&A Update

During the first half of 2020, M&A activity in the automotive industry was down from previous years due to uncertainty stemming from the COVID-19 pandemic, with cross-border deals becoming more complex. However, the pandemic also resulted in new opportunities for consolidation within the industry.

There were $11.9 billion in M&A deals, which represented a 54.8% decrease in value compared to the first half of 2019. Most investments were in the pursuit of CASE (Connected, Autonomous, Shared, Electrified) technologies. This type of tech is predicted to drive M&A through the end of 2020. Dealmakers are expected to concentrate on securing supply chains and increasing resiliency rather than expanding globally.

Global Deal Activity

The majority of deal value in volume in the first half of 2020 took place in Asia and Oceania, followed by North America. The largest automotive transaction in the first half of the year was valued at $2.9 billion, with Traton SE, a vehicle-manufacturing subsidiary of Volkswagen AG, acquiring Navistar International Corporation. Volkswagen Group China continued to strengthen its electrification strategy by making two acquisitions valued at more than $1 billion each: Gotion High-tech Co. and JAC Volkswagen Automotive Company.

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Benchmark International Successfully Facilitated the Transaction Between Greenkey Garden & Home Ltd and Retail Equipment Limited

Benchmark International is delighted to announce the sale of Gloucestershire-based Greenkey to Suffolk-based Retail Equipment.

Established in 2003, Greenkey is a trademarked brand and is an established distributor of its own brand of garden equipment, garden décor and animal habitats. The company supplies to garden centres, DIY outlets, agricultural merchants, and online retailers nationwide.

Retail Equipment is a wholesale company selling shopfittings. The acquisition is part of the company’s buy and build strategy.

Do you have an exit or growth strategy in place?

The directors Jeremy and Emma Parkes will retire in six months allowing the opportunity for the new management to develop the business further.

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When Is The Right Time To Retire?

The right time to retire is going to be different for everyone based on individual circumstances and goals. While finances are obviously a major factor in the decision, being emotionally and mentally ready is equally important. Here are some points you should consider if you are thinking about embarking on retirement.

Financial Stability
Retirement hinges upon having the appropriate income to support a comfortable lifestyle in the future. This entails having an accurate and realistic picture of what your expenses will be and how much you will need in order to cover them, including income from your savings, pensions, social security, 401ks, IRAs, and any other assets. The earlier you plan to retire, the more significant your nest egg will need to be. Waiting a few years can help you build up more financial security through tax-advantage investment accounts. So if you love what you do, a later retirement means that you can continue doing it while you shore up your savings for the future. A common algorithm for retirement planning is to have savings that are 25 times the amount of your annual expenses.

No Debt
When heading into retirement, it is advised that you make sure you do not have outstanding debt in the form of high-interest credit cards and outstanding loans aside from a mortgage or car financing, which can be taken into account for your needed expenses. By eliminating debt, your retirement income can be used for current expenses instead of past expenses and offer you added peace of mind.

The Economy
While there is no way to be sure what the future holds, if there are signs of an economic downturn, you may want to hold off on the retirement plans for a bit. This will give the markets time to recover, which will help you recoup your invested assets and retire with a better bottom line.

 

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6 Considerations When Selecting A Transaction Advisor

The most expensive mistake in selling a business is to undersell it. A qualified intermediary can add significant value to a transaction simply by virtue of experience.

Putting this into context, buyers are fit for transactions, they conclude deals in multiple jurisdictions and often have dedicated teams that focus exclusively on mergers and acquisitions. Business owners may typically have done a transaction or even two in their careers, but most often they have not yet sold a business and can benefit enormously by having a seasoned sell-side advisor on their team.

Whilst there are very broad categories of advisor; no two intermediaries are the same. In selecting an advisor there are some fundamental questions to ask that will help establish whether the firm will meet your specific needs and requirements.

1. Who will manage my deal?

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M&A Outlook Under Biden Election Win

Now that Biden was named the President-elect, what does this mean for mergers and acquisitions under a Biden administration? The good news is that mergers and acquisitions activity is expected to increase regardless of the election results. Many experts predict that M&A activity will return to pre-pandemic levels in the next year, and that the market will be favorable for the next few years.

Taxes
President Biden’s proposed tax plan raises the corporate tax rate from 21% to 28%, which would likely make M&A deals more expensive. Biden has also voiced support for an increase in capital gains taxes, which could impact M&A activity. The proposed plan would tax long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6% on income over $1 million, and eliminates step-up in basis for capital gains taxation. Sellers may be anxious to complete deals prior to 2021 to dodge higher taxes and potentially lower valuations, and to avoid having increased capital gains taxes cut into profits from a deal.

The Biden plan also restores the top individual federal income tax rate from 37% to the pre-Trump rate of 39.6%. It also promotes tax provisions to penalize the exporting of jobs overseas and to incentivize investments in new infrastructure and green energy, transportation and manufacturing, and establishes a minimum tax on corporations with book profits of $100 million or more, structured as a 15% alternative minimum tax, to prevent them from paying no taxes. The plan also offers tax credits to small businesses for adopting workplace retirement savings plans and creates a Manufacturing Communities Tax Credit to reduce the tax liability of businesses that face workforce layoffs or a major government institution closure.

It is important to note that getting tax code changes enacted into law requires congressional leadership and the White House to work together to reach consensus. This can be challenging, and can also take a considerable amount of time, meaning that there may not be immediate tax implications for M&A. But you still may not want to wait until 2021 to sell your company. Here’s why.  

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Benchmark International Successfully Facilitated the Transaction Between Johnson Claim Service, Inc. and Davies

Benchmark International facilitated the transaction of Johnson Claim Service, Inc. in Tulsa, Oklahoma. It has been acquired by Davies.

Johnson Claim Service provides insurance adjuster and appraisal services for insurance contracts written to cover property, casualty transportation and agricultural claims. The transportation claims include truck, trailer, heavy equipment physical damage, motor truck cargo, dealers open lot, garage keeper’s legal liability and non-truck liability. The company has both a domestic and international client base for which its services are provided.

Allen G. Johnson, President of Johnson Claim Service commented regarding the transaction, "We engaged Benchmark to assist in providing professional services in the sale of our insurance related business.   Their team, and most importantly their Deal Associate who handled our transaction through to completion, stayed involved during some difficult negotiations.  The Deal Associate helped JCS finish the business sale with a very positive result for the owners.  Great job Benchmark International!"

Johnson Claim Service will join Davies already established Claims Solutions business in the US, adding specialist transportation claims capability. Globally Davies has more than 4,000 colleagues, with operating centers across the UK, Ireland, Bermuda, the US and Canada.  The business delivers professional services and technology solutions across the risk and insurance value chain, including excellence in claims, underwriting, distribution, regulation, customer experience, human capital, digital transformation & change management. This deal marks Davies sixth acquisition of 2020. 

Ready to explore your exit and growth options?

Benchmark International proved its 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.

Deal Associate Amy Alonso at Benchmark International commented, “Benchmark International added value by negotiating this deal. We saw throughout the entire process that the buyer, Davies, was a perfect fit who stood to benefit greatly from the experience, industry knowledge and high quality service that they would gain from the existing owner. With this knowledge, the team was able to negotiate a deal that would allow for the existing owner to successfully transition the business to a capable buyer. We wish Johnson Claim Service Inc and Davies the best of luck in their future endeavors.”

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Benchmark International Is Proud To Be A Part Of The 2020 OCFO Founders Conference

Benchmark International is proud to be a part of the 2020 OCFO Founders Conference, taking place virtually, during Global Entrepreneurship Week on 19th November 2020.

As part of the event, Dustin Graham, Managing Partner of Transactions for Benchmark International's South African offices, will be speaking on the topic Building Your Business For Sale.

Topic: Building for Sale,  14:40–15:00 – Dustin Graham
Event date and time:
19th November 2020, 13:00–16:00
Location: Virtual event
Link to register and ticket sales:  https://zcu.io/1od4
Link to event agenda: https://www.foundersevents.co.za/agenda/

OCFO Founders Conference Annual Event
The annual Founders Conference normally takes place in the heart of beautiful Cape Town during Global Entrepreneurship Week. However, in the light of Covid-19, It was decided to host the Founders Conference as a virtual event this year.

The conference brings together top business people, investors, and entrepreneurs in South Africa for powerful networking, learning, and inspiration. The Founders Conference is one of the biggest gatherings of entrepreneurs on the African continent—not to be missed by any serious founder. Speakers include some of the most successful founders around the globe and investors who have raised and invested billions.

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How To Successfully Maintain A Strategic Partnership

Strategic partnerships or alliances can be very effective business tools and are important to the health and growth of a company. They can enhance capabilities, and open up shared access to new markets, channels, intellectual property and lowered risk. But they can also be complex. Once you form this type of partnership, it takes some effort to maintain it and ensure that it is a win-win for both parties involved. By taking the right steps and having a clear vision for your long-term strategic partnership, you can help it create value, thrive, and boost your business. 

Narrow Your Focus

There are many businesses that you could form a partnership with, but you have to narrow it down to what makes the most sense. What partners serve similar customer bases that make sense? For example, if you have a landscaping business, consider partnering with a nursery or a landscaping supply company. You’ll be serving the same buyer and can pass on referrals while streamlining the process and relationship for the customer.

See Both Sides

A strategic partnership, like any relationship, needs to work for both sides in order for it to flourish and yield mutual benefits. When you’re pitching the alliance to a potential partner, consider the benefits for them and present them clearly.

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How PPP Loans Affect Your Ability To Sell Your Business – We Now Have Guidance

In this webinar, Clinton Johnston, Managing Director at Benchmark International, will share Benchmark International's collective insights from the various transactions we have closed for clients with outstanding PPP loans both before and after the issuance of the SBA's October 2nd guidelines regarding PPP loans and changes of ownership. 


Click Here To Watch The Webinar: How PPP Loans Affect Your Ability To Sell Your Business - We Now Have Guidance 

 

We have also included handouts that go along with this webinar for you to download and view at your convenience. Please see the handouts below:


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Benchmark International Successfully Facilitated the Transaction Between Tom Walker & Sons Limited and HMS Ltd

Benchmark International is delighted to announce the sale of Stockton-on-Tees food packaging firm, Tom Walker & Sons (TWS), to Glasgow-based food ingredients group, HMS.

Established in 1982, TWS is one of the UK’s leading distributors, importers and packers of cheese products, supplying to a national retail and wholesale customer base. Services include cutting and packing, co-packing, new product development and national chilled distribution of a vast selection of cheeses, including Cambozola cheese, of which it is the sole UK distributor.

HMS and its subsidiaries are one of Europe’s largest food ingredient distributors. Established in 1992, HMS has a turnover in excess of £210m and provides UK and European coverage through a network of six warehouses and 73 vehicles. The acquisition of TWS will allow the company to benefit from adding additional food products to its current offering.

Ready to explore your exit and growth options?

Following the acquisition, TWS will continue to operate as a stand-alone business and will be headed up by Russell Eley who will take over from Peter Walker, the current managing director.

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Enhancing Company Value By Enhancing Culture

Culture Affects the Bottom Line

When a company demonstrates that it’s thriving with happy and motivated talent, it is more likely to garner a higher business valuation when going to market for a merger or acquisition.

There is a proven link between culture, employees, productivity, and profit. Research shows that:

  • Businesses with satisfied employeeshave been noted to outperform competitors by 20 percent.
  • Happiness leads to a 12 percent boost in productivity and companies with strong cultures see a 43 percent increasein revenue growth.
  • When employees are engaged, absenteeism falls 41 percent, productivity rises by 17 percent, and turnover is cut by 24 percent.
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Benchmark International Successfully Facilitated the Transaction Between Rivanet Limited and Intec Business Solutions Limited

Benchmark International is pleased to announce the acquisition of education technology specialists, RivaNET™, by business technology company, inTec.

RivaNET™ is a provider of innovative enterprise grade IT solutions to independent schools and colleges in London and the South East. Delivering optimised technology and infrastructure, in addition to cyber security and managed support services, the company’s offering promotes an exceptional learning environment whilst safeguarding pupils, staff, and institutions.

inTec is a technology telecoms and IT support company offering 'Work Smarter' solutions, such as streamlining processes, improving workforce productivity, and reducing operating costs.

Ready to explore your exit and growth options?

RivaNET™ will play a leading role in inTec’s strategy to build a dynamic technology group, allowing inTec to expand its geographic reach and move into the education sector.

Going forward, RivaNET™ will continue to trade as such and will be led by current Managing Director, Nick Donoghue.

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The Value Of Professional Exit Planning

Exit planning is how business owners prepare to depart from their private company and maximize its value through a merger or acquisition to increase shareholder value or transition the company to serve other objectives. It basically arranges for you to leave your company on your own terms. Unfortunately, many business owners do not recognize the value in professional exit planning because they do not see their company from the perspective of a potential buyer, resulting in significant loss of value when exiting the business.

A solid exit plan clearly defines the business owner’s objectives, and lays out a comprehensive strategy that accounts for all personal, business, financial, legal, and taxation aspects of reaching those objectives, including leadership succession and the future of the business. These objectives include the maximization of value, mitigation of risk, conducting an expedient transaction, and finding the right investor to take over the business in its best interests. The strategy may also cover worst-case scenarios, such as illness or death of the business owner. Quality exit planning usually should take place around 10 years prior to transitioning the business, to allow for value strategies to flourish.

Why It’s So Important

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In Case You Missed It, Catch Dustin Graham’s Fireside Chat At The Recent SA Innovation Summit.

Dustin Graham, Managing Partner at Benchmark International, Cape Town, virtually chatted to innovators and business owners about the critically necessary planning for their exit and their worth at the recent SA Innovation Summit.

The SA Innovation Summit is the largest startup event in Africa, and brings together top entrepreneurs, investors, corporates, and thought leaders to inspire sustained economic growth across Africa. The Summit provides various platforms for developing and showcasing African innovation, as well as facilitating thought-leadership.

The interaction between Dustin and Jonathan Smit, founder of PayFast, is well worth a listen.

Listen Now on Vimeo: Planning Your Exit

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Benchmark International Successfully Facilitated the Transaction between Advantage Plastics of New York and an Affiliate of Orchard Creek Capital

Benchmark International is pleased to announce the acquisition of Advantage Plastics of New York and Sherri Plastics (Advantage Plastics), to an affiliate of Orchard Creek Capital.

Advantage Plastics specializes in thermoforming a variety of plastic products across numerous industries. Specialties include vacuum forming, CNC trimming, laser cutting, and laser engraving. The company works with a wide array of materials, including ABS, HDPE, Acrylic, and PVC.

Owner, John Salva with Advantage Plastics commented regarding the deal completion, "The team at Benchmark really stepped up and took care of all of us. It was important to us that we find a buyer that would compensate us for our life's work, as well as value our wonderful team of employees."

Ready to explore your exit and growth options?

Orchard Creek Capital is an investment company based in Northville, Michigan that invests in small manufacturing businesses across the United States. Their investment focus is on successful companies with established track records and solid growth prospects. In 2018, Orchard Creek acquired a plastic injection molding company in Grand Rapids, Michigan. Acquiring Advantage Plastics brings additional assets in the plastics space.

Senior Transaction Associate Sunny Yang Garten at Benchmark International commented, “It was a pleasure to represent Advantage Plastics in this transaction. We’re excited to see that the legacy will be preserved and enhanced through this transaction. On behalf of Benchmark International, we wish both companies continued success.”

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Benchmark International has Successfully Facilitated the Transaction Between Kent Catering Services (Bromley) Ltd and Catercall Ltd

Benchmark International is pleased to announce the acquisition of Kent Catering Services (Bromley) (KCSB) by Birmingham-based Catercall.

KCSB was established in 1995 by David Clarke and since then has operated within the commercial catering equipment maintenance industry, covering London and the Home Counties.

Ready to explore your exit and growth options?

The company is a specialist in the installation, maintenance and repair of commercial catering equipment, working alongside a wide range of clients including hotels, restaurants and schools.

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Benchmark International Successfully Facilitated the Transaction Between Hillcrest Urgent Care of Alabama, PC and Carbon Health

Benchmark International facilitated the transaction between Hillcrest Urgent Care of Alabama (serving the Greater Mobile area) and Carbon Health of San Francisco, CA.The seller, Hillcrest Urgent Care of Alabama, has been providing urgent care services to the Greater Mobile, AL market since 2013. Hillcrest has repeatedly remained on top of the most reputable urgent care facilities in Mobile and ranked 2nd in the state of Alabama. Dr. Gamil “Jimmy” Dawood is a compassionate individual with a true love of providing acute care services to patients looking for convenient, reliable care.

Dr. Jimmy Dawood mentioned regarding the transaction, “I was very pleased to find out that Carbon Health shares the same philosophy of putting patients first and providing excellent care in a friendly environment as I do. The Benchmark team was always available and more than a partner in the whole process! Matthew Kekelis and Neal Wilkerson in particular were very professional, resourceful, supportive and friendly. They went above and beyond to ensure the successful completion of the sale.”

Ready to explore your exit and growth options?

The buyer, Carbon Health is a San Francisco based technology-enabled healthcare provider delivering omnichannel primary and urgent care across the country. The company, launched in 2015, has re-engineered healthcare delivery from the ground up to provide an exceptional experience for both providers and patients, making high-quality care accessible to all.

“We are grateful to work with Benchmark International and Dr. Dawood of Hillcrest Urgent Care of Alabama for a seamless transition,” said Will Abbott, Chief Operating Officer at Carbon Health. “Dr. Dawood and his team have built a thriving practice in the Greater Mobile community. The Carbon Health team is excited to build on this foundation and continue to provide high-quality care while integrating additional innovations to expand services and meet the community where they are.”

Regarding the deal completion, Transaction Director Matthew Kekelis at Benchmark International commented, “Benchmark, through are open bid process, was able to secure many interested parties in a short period of time. Because of this, we were able to successfully negotiate an offer our Client could not pass up. A straightforward diligence process with open lines of communication between all parties expedited the time to deal completion. “Everyone involved in this transaction diligently worked together and agreed early on that this was a great match. Hillcrest Urgent Care is a beacon of healthcare excellence in the community. We were all excited to find the perfect buyer, Carbon Health, to build upon Hillcrest’s commitment of providing exceptional healthcare.”

ABOUT CARBON HEALTH Carbon Health is the technology-enabled healthcare provider designed from the ground up to put patient-care first. By combining technology with modern clinics, it delivers a uniquely seamless experience from virtual care to in-person care to meet patients where they are. Carbon Health removes the boundaries to high-quality, transparent and personal care and envisions making patient-centric, world-class care accessible and a reality for everyone. Carbon Health is headquartered in San Francisco with clinics across California and virtual care in 16 states across the U.S. To access Carbon Health, download the app (iTunes or Google Play) or visit carbonhealth.com.

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Why You Shouldn’t Wait For 2021 To Engage With An M&A Advisor

2020 has certainly served up its share of uncertainties and economic concerns thanks to the COVID-19 pandemic. There seems to be a popular attitude that once 2021 arrives, everything will simply return to normal. If you are considering selling your company, you may not want to wait until next year. Here’s why.

Some Things Haven’t Changed

Regardless of the pandemic and economic concerns, certain factors remain constant. Investors sitting on plenty of capital are always seeking opportunities, no matter what is happening in the economy.

First, it is important to note that there was a record-setting amount of capital raised in 2019.

  • Across 1,064 private equity, venture capital, infrastructure, and real estate funds, an astounding $888 billion was raised.
  • Globally, PE firms raised more money than any previous year, closing on almost half a trillion dollars
  • More than $300 billion was raised in U.S. private equity alone.
  • More than $100 billion in capital is still unspent in funds that are six years or older. 
  • In the U.S., venture capital funds saw a huge year for investment realizations, and exit value more than doubled year-over-year. This cash will eventually be distributed to limited partners and investors are likely to reinvest it in new funds.

It could easily be a seller’s market in your sector. Plenty of businesses have seen valuations rise because their services are in higher demand in the current environment. If your business is fortunate enough to fall into this category, selling now can be critical to getting maximum value.

Additionally, tens of thousands of Baby Boomers are still reaching retirement age and many of them are also business owners. Those who own companies that have suffered due to the pandemic may be more likely to consider retirement and an exit strategy because they don’t want to put in the time, effort and money to rebuild their business at their age. They could flood the market at any time, meaning you will be facing increased competition, giving buyers the upper hand. This scenario can also result in a lower valuation for your business. It is another solid reason you should consider starting the M&A process sooner rather than later.

 

Ready to explore your exit and growth options?

 

We Know the NOW

Nobody can say for sure what the future holds for the economy, but we do know what the state of it is today. When we know and understand what is certain right now, we can make educated decisions based on current circumstances. These circumstances include political factors, trends within your sector, what your competition is doing, buyer demand, as well as current market values, tax rates, and interest rates.

  • Right now, the U.S. is seeing the lowest interest rates in its economic history. On September 16th, the Federal Reserve left the target range for its federal funds rate unchanged at 0-0.25%, and signaled that it would keep them at that level through at least 2023.
  • At this time we also know the current tax environment. We can only expect that taxes will increase in the long term in order to overcome the growing debt burden that has been created in 2020 because of economic damage caused by the COVID-19 pandemic.

While you might feel that waiting until 2021 will allow you to sell your company for more money, that is not necessarily the case. There is no proven data to support that theory, and you could actually end up selling your company for a lower valuation because you chose to wait. Also, the right timing depends heavily on the activity in your sector. What type of business you own can constitute the best time to sell, even during a pandemic. It could actually be the perfect time.

You Can’t Prepare Too Soon

Timing is everything when it comes to selling a business. And sure, 2020 seems to have turned everything upside down, but we also cannot predict what 2021 holds. Optimism for the future is somewhat human nature during a long-term crisis, but questions surround the timing and availability of a vaccine for the virus, and how quickly the economy will fully recover.

It is important to note that plenty of businesses are still being bought and sold in 2020. If you put off a sale too long, you could run the risk of missing out on a great opportunity to get the most value for your company. But at the very least, you should not put off the preparation for a sale. It can take several months to years to complete a merger or acquisition. Even if you are unable to sell this year, starting the preparation process now can position you for a seamless transaction down the road. You should engage now to ensure that your company can be put on the market at the beginning of 2021. When the process is done correctly it can take 30-60 days just to get a business on the market, and a total of 6-12 months to close a deal. Waiting until January to act could put you at a major disadvantage with buyers on market at the beginning of the year.

Preparing now will also position you as a more patient seller, versus one that is panicking to unload your business without a solid exit plan. Buyers will see you as desperate, leading them to offer you less money. If you demonstrate that you have been carefully preparing for a sale and have done your due diligence, you are likely to garner a higher sale price.

Another advantage of preparing for a sale is that it can put you in the position to test the market. Maybe you are not sure if you should sell. So, why not put your business out there and see what kind of offers come back? You might be surprised at what emerges. If you still don’t want to sell, you can simply take your business off the market and wait for a better time. However, if you choose to do that, you do run the risk of appearing that you are not a serious seller in the future. Working with a reputable M&A firm can help steer you through the process and protect you from making common seller mistakes. They will also help you control the narrative, so that your business remains positioned in a positive light no matter what decisions you ultimately make.  

Let’s Start the Conversation

Our M&A experts at Benchmark International know how hard you have worked to build your business. Even if you are not sure if you are ready to sell, reach out to us and we’ll help you figure out what is best for you, your company, your family, and your financial future.

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2020 Financial Services Sector Update

As the world still faces the COVID-19 pandemic, businesses in the financial services sectors are preparing themselves for life after coronavirus. This includes the management of credit risk for borrowers, and turning to digital strategies to drive revenue growth.

Insurance and Innovation

The COVID-19 pandemic is forcing the entire insurance sector to implement and leverage digital platforms that enhance customer experiences as a key part of their business strategies in a transformed world in which people are working remotely and driving their vehicles less often. The pandemic has led insurance companies to implement premium relief efforts, offer payment deferral plans, and expand coverage, but these companies are also turning to more digital strategies, emphasizing online customer experiences at a time when more and more transactions occur online versus in person. Consumers are demanding new products such as cyber insurance, more modern life insurance options, and usage-based car insurance. Middle-market insurance companies have always been a bit technologically behind the big players, but they now must adopt new innovations in order to merely keep up with convenience, simplicity, mobility, and modern interfaces that customers have come to expect.

Banking and Lending

Financial institutions are in a position where they need to understand borrowers’ needs and current financial states more than ever. They must also find new ways to measure performance through the rest of 2020. They have already provided assistance to many small and mid-size businesses during the crisis, some of which will be forgiven. Loan modifications have been provided to help businesses survive, and there is likely to be some loan losses. As the economy begins to recover, banks will be able to get a better understanding of borrowers’ financial states, knowing that it will take some time for businesses to bounce back. Deciding whether to lend more credit will be a difficult decision for financial institutions, especially for harder hit sectors such as hospitality and retail. Understanding the recovery of these industries as a whole will be critical through the use of data and payment activity monitoring.

Family Offices

Family offices are private wealth management firms that serve high-net-worth individuals and their families by offering a total outsourced solution to managing finances and investments. There are nearly 2000 of these types of firms around the world, with more than half in the U.S.

These firms have typically relied on physical offices to conduct business. Now in the wake of COVID-19, a shift to virtual family offices has become a necessity during a time where remote work has become commonplace. This has been a challenge for many family offices because most simply do not have the appropriate technology and infrastructure to result in a seamless transition to a virtual office. These businesses will be forced to evolve technologically into the rest of 2020 and beyond. As outdated technology is replaced with better performing innovations, family offices will become more mobile and agile, as well as better equipped with more adequate cybersecurity. Connectivity is also a timely issue, as Millennials will be inheriting family wealth in the future and they demand immediate access to data without disruption and with more transparency. This digital transformation to virtual family offices will also allow for a leaner staff that can deploy resources more quickly.

Capital Markets

The events of 2020 have led capital markets to affect businesses in different ways. Underwriting slowed for high-yield borrowers. Mergers were put on hold. Stock markets have been up and down, and a record number of securities and their values have been exchanged. As financial conditions improve, confidence combined with cheap credit will have companies seeking liquidity to get through the rest of the crisis. Corporations have been tapping into the public debt markets at high rates. While this generated profits at the start of the recession, bonds are less likely to be issued as businesses restore their reserves and establish liquidity that will be needed into the future.

For the rest of 2020 and into 2021, investment banking associated with M&A activity will continue to be tied to the economic recovery amid a softer deal pipeline. When the economy finally bounces back, there will be opportunity for a backlog of deals, boosting advisory revenues.

Data and Private Equity

In the time of COVID-19, certain private equity trends have emerged and are expected to be here to stay. People are still paramount, but how they work has changed. Data continues to be more important to deal making to determine the areas for greatest earnings impact. Datasets will track strategic movements and metrics within companies to gauge their performance. Remote workforces will allow competitive PE firms to source key financial talent from entirely new geographic regions. Firms are also expected to outsource more of their back-office work functions and instead focus on front-office responsibilities.  

Ready to Sell?

If you are a business owner who is considering making a move, our M&A experts at Benchmark International would love to discuss how we can help with the sale, exit or growth of your company.  

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Benchmark International Successfully Facilitated the Transaction Between Development Processes Group Limited and ICS Learn

Benchmark International is pleased to announce the acquisition of Manchester-based Development Processes Group (DPG) by Glasgow-based ICS Learn, backed by Primary Capital.

DPG was established in 1991 and is a training and development provider specialising in CIPD qualifications to both B2C and B2B clients via online courses, traditional classroom workshops and blended online content.

Founded in 1889, ICS Learn has been a pioneer in distance learning for more than 130 years. It is an online learning provider with over 25,000 current students, offering award-winning courses with unlimited tutor support and operating over 100 countries.

Ready to explore your exit and growth options?

Both companies will combine their collective knowledge and talent with the aim of delivering an unrivalled experience for students starting or advancing their career in HR.

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Benchmark International Successfully Facilitated the Transaction Between The Bailey Group Administration Company Limited and SKS Business Services Limited

Benchmark International is pleased to announce the merger between Peterlee-based Bailey Group and London-headquartered SKS Business Services.

Founded in 2006, Bailey Group is an award-winning independent group of accountancy firms operating 10 practices throughout the UK, providing the preparation of management and final accounts, as well as auditing, cloud accounting, tax advice and planning.

SKS is one of the fastest growing SME-focused finance outsourcing, accounting services and tax/business advisory firms in the UK.

Its biggest merger to date, the aim of the transaction is to allow SKS Business Services to expand into the North East. The addition means that SKS now has a presence in five out of the eight UK regions, including the East of England, the South East of England, London, the North West of England, and now also the North East of England.

Ready to explore your exit and growth options?

Going forward, Bailey Group will now be known as SKS Bailey Group and the combined entity now contains twenty-five offices across the UK and with nearly 11,000 SME clients.

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Benchmark International Successfully Facilitated the Transaction Between Read's Uniforms and Brighton Partners Equity

Benchmark International has successfully facilitated the transaction between Read’s Uniforms and Brighton Partners Equity. Read’s Uniforms, Inc., hereinafter referred to as “Read’s”, is an omnichannel distributor of uniforms and accessories for resale to all five major uniform verticals including medical, public safety, industrial, hospitality, and education. This multi-location provider has access to key brands in all major verticals. The company has ten locations throughout Florida, Tennessee, South Carolina, and North Carolina.

Eric Hutzler, Owner of Read’s Uniforms, mentioned regarding the transaction, “As founders, we were very pleased with the pipeline of qualified buyers that Benchmark was able to produce. We had multiple options to choose from, each with a unique upside to consider. Ultimately, it is highly unlikely we would have found any of these opportunities on our own.”

Brighton Partners Equity hereinafter referred to as “Brighton” is a private equity firm focused on regional distribution and service companies where geographic expansion is a key driver of future growth. Brighton takes a hands-on approach, bringing objective analysis and years of small, growth-oriented company experience to each investment opportunity. They pride themselves on being good communicators; with their management teams, lenders, and limited partners.

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Read’s was a perfect fit into the current portfolio of Brighton, and an excellent platform for Brighton to expand upon based on their investment thesis. The challenges that COVID presented during this transaction were not insignificant, causing all sides to come together and develop creative financing solutions when the debt markets were retracting. This deal is a cathartic end to the Hutzler’s vision and a welcome beginning to a new partnership that is sure to thrive in the coming years.

Benchmark International’s Managing Director, Dara Shareef commented regarding the deal completion, “Benchmark International is happy to have successfully facilitated the transaction between Read’s Uniforms and Brighton Partners. Deal fatigue could have impeded this transaction at many points, but both sides remained diligent in their efforts. We certainly look forward to the prospect of working with the Hutzlers and Brighton Partners again should the opportunity present itself.”

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Benchmark International’s James Robinson Wins ‘Young Accountant of the Year’

Benchmark International is proud to announce that James Robinson, Associate Director for the Manchester Transaction Team, has been awarded ‘Young Accountant of the Year’ by Insider Media as part of its North West Young Professionals Awards 2020.

This award is for accountancy-related professionals and includes people working in professional practice and in the finance teams of corporate businesses.

Due to the Covid-19 pandemic and subsequent restrictions, no awards ceremony took place this year, but the achievements of those across a range of sectors including banking, accountancy, law, property and marketing, are still being honoured.

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2020 Retail Sector Update

The COVID-19 pandemic and the resulting government responses have had a significant impact on consumer spending, with retailers closed for months and shoppers staying home starting in the early part of 2020, with the timing of closures varying by country. Many consumers continue to stay home, even as most businesses have reopened. Online shopping has surged due to the pandemic. In the U.S. and Canada, e-commerce orders are up 146%.

Household consumption increased over the summer and is forecast to continue. Certain consumer behaviors that were newly formed during the earlier stages of the pandemic are expected to permanently influence spending habits. Retailers will need to clearly understand these behavioral shifts as they navigate the immediate future, and into the long term if they plan to succeed amid the new normal.

Digital as Key Driver

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Key Steps For Expanding Your Business Into New Markets

As globalization becomes more common in our world, many businesses are choosing to take advantage of the growth opportunities that lie in expanding into new markets. But expansion can be a significant undertaking for small and middle-market businesses, with many moving parts. As a business owner, you need to fully assess and understand the risks and rewards that expansion can present for your company. The following steps outline areas on which you should focus, and which elements of your business you should have ready in order for an effective expansion into new markets.

Impact Assessment

Before expanding your company into new markets, you must have a comprehensive understanding of what the overall impact on your business will be. Conduct market segmentation and product gap analyses to assess whether your product or service will sell in the target market and do a SWOT analysis to see how it stacks up against local competitors. You need to know if there is a need for your company and if anyone will buy what you are selling. You will also need to consider how large the market is and how long it may take to reach your target sales numbers.

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Life Sciences And Biotech M&A During Covid-19

The COVID-19 pandemic has created an urgent demand for testing, treatments and a vaccine from life sciences and biotech companies. It has also changed the deal-making landscape in this sector. Advances in genetic sequencing have led to the development of new immunotherapies and approaches to medicine that has lowered risk and boosted M&A value and volume.

Over the past five years, biotechnology M&A activity has generated hundreds of completed deals and hundreds of billions of dollars in aggregate value. Leveraged buyouts accounted for one fifth of all acquisitions completed in three of the past four years. The compound annual growth rate of the biotech market is 7.4 percent, on pace to reach $727.1 billion by 2025. There are currently upward of 100 experimental COVID-19 treatments and vaccines in development, including 11 being studied in clinical trials.

The life sciences sector is the key to a solution for COVID-19, from testing improvements to vaccine candidates. In April, Moderna Therapeutics was given $500 million from the U.S. Department of Health and Human Services to accelerate development of its mRNA vaccine. Over the past ten years, public and private sector researchers across biotech have collaborated to greatly reduce the lag time between genetic sequencing of a virus and running human trials. With academia partnering with governments to speed up development, it is expected to be positive for the long-term strength of the sector.

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Guide To A Healthy & Wealthy Retirement

You have worked so hard to build your business and when retirement is finally on the horizon, it is a very exciting time. But it can also come with many questions. These tips will help you navigate the ins and outs of retirement so that you can live your best life.

Keep Making Plans

Just because you are approaching retirement, it doesn’t mean you are retiring from life. Keep planning for your future. Consider five-year plans and goals. Think about taking college classes or acquiring new skills you have always dreamed about. Getting another degree, learning something like playing an instrument, or learning a new language can be great ways to keep your juices flowing and open up new opportunities in life.

Explore the Best Places to Retire

The world is brimming with amazing places to consider for your retirement years. Maybe you are perfectly content staying where you are. But have you even thought about the possibilities? Check out our article about some of the greatest places to retire…and be inspired.  

Have a Solid Financial Plan

This includes investment options, taxes, and more. There are many ways to invest, such as mutual funds, stocks, bonds, real estate, dividends, CDs, annuities, and exchange-traded funds. Additionally, having an exit plan can ensure that your future is protected. Prior to exiting your company, mergers and acquisitions strategies can help you grow your business and maximize its value for a sale, laying the groundwork for worry-free retirement wealth. Experienced M&A advisors can help you make the most of this. You will also need to consider how much you will need to pay in taxes after you retire. This is something you will definitely want to get right. Some estimates suggest that for each 1% error in effective tax rate, you face an 8% error in your final savings balance.

Stay Structured

Maintaining a routine can be a major game changer for keeping your sanity in retirement. You no longer need to go to the office. So what do you do? It is easy to find yourself meandering and not knowing what to do with yourself. That’s why it’s important that you stay busy and have some sort of structure to your everyday life now that you are no longer on the clock. Engaging in activities such as volunteering, gardening, and exercising can keep you healthy, happy and regimented.

 

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Maintain a Youthful Perspective

They say age is just a number. And there are actually studies that support how mental attitude can improve overall health and even reverse the effects of aging. Thinking young can actually help keep you feeling and functioning as young. It helps to stay inquisitive, continue to develop and improve yourself and expand your horizons. Falling into a rut after retiring can be detrimental to your state of mind and your physical health. It can also be very helpful to maintain social relationship with younger people to keep up with changing perspectives, get inspired, and hear about more than gripes regarding the aches, pains, and medications associated with aging.

Map Out Your Legacy

In addition to the impact you will be leaving on the world through your professional endeavors, you will want to make plans for your estate to determine what you wish to leave for your heirs. This is when a financial planner can be of great help. You will need to think about estate taxes, appropriate inheritances, and the roles of your family if they will be taking over your business.  

Consider Catch-Up Contributions

You already know that there is a limit to how much you can save in your IRAs or 401(k)s. But did you know that once you reach the age of 50 in the U.S., the IRS allows you to make additional catch up contributions that are beyond annual contribution limits? It’s a way to make it easier for savers over the age of 50 to boost their retirement savings.

Understand How to Protect Yourself from Fraud

Fraudsters are known to target people over the age of 60, especially in today’s digital society. Stay educated on what scammers are up to and know how to discern between what may be real and what may be fake regarding emails, texts, phone calls, and the physical mail. A good rule of thumb is to remember that if it sounds to good to be true it probably is. Also, unsolicited offers can be common traps. Other things you can do include not answering robocalls, not clicking on pop-up ads or email attachments, being skeptical of free offers, and not paying up front for promises.     

Think Long Term

Today’s life expectancy rates are much higher than they used to be just decades ago. You should plan your retirement with a long future ahead. This is not only good for your mental wellbeing, but also important for your financial future. Consider that your savings will need to last longer. Your healthcare costs may be higher. Search for retirement calculators online to help you get a better picture of what your needs will be. 

Get a Dog

The many benefits of having a dog to health and wellness are well documented. Dog owners have been proven to enjoy lower blood pressure and stress factors, and need fewer doctor visits than those without pets. Having a dog can also help to keep you active and engaged with other people. Plus, all that unconditional love releases beneficial hormonal chemicals such as serotonin and oxytocin that are proven to fight depression and make you feel good. 

Ready to Retire?

Contact our M&A experts at Benchmark International to start the conversation about selling your company, planning your exit strategy, and getting on the road to a prosperous retirement.

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Middle Market M&A Valuation Gaps And Expectations

Many factors can impact middle-market M&A deal making, but one of the most significant issues that can affect closing is a valuation gap between the seller and buyer. This tends to be more common during a seller’s market because business owners with successful companies are inclined to wait for the best offer, versus a buyer’s market that occurs when there are fewer buyers, which motivates sellers to jump at an offer. Unrealistic expectations about valuation multiples often stem from the comparison of a mega deal to a middle market deal—a situation under which the same multiples are typically not going to apply.

There is also often a disparity between what a seller needs to maintain their retirement lifestyle and what value can be extracted at the time of the sale. There may be differences between a buyer’s offer, what they pay, and what the seller ultimately receives, as taxes are always a factor in a transaction. Additionally, the timing of the deal and the perception of risk regarding future growth and earnings flow for the business can play a major role in the size of the valuation gap. Selling a business is a highly complex process and it comes with great emotional implications for a seller. Emotional ties coupled with overt optimism can easily cloud one’s vision when it comes to the actual value. As a business owner, you put in a great deal of work starting your company and building it into what it is today. In contrast, selling that business is completely unchartered territory for most owners. When you are looking to sell, you need to be realistic regarding the company’s current value and its growth rate, and what the buyer will be getting out of their investment. Buyers are not going to recognize the hard work you put into starting the business in the same light that you do. All that work you did in the beginning is not on their radar—they are going to be focused on their returns.    

 

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Valuation gaps also result when private equity firms and strategic buyers compete for quality investments and relatively inexpensive financing is available. This can be both good and bad for middle-market business owners. Significant buyer interest creates considerable competition for quality deals, which is great. But at the same time, if the market is hot and demand is high, unrealistic valuation expectations and skewed perspectives can result in a valuation gap.

This is why a thorough evaluation of a business is so crucial to the M&A process. A good M&A advisor will take meticulous steps to best determine an accurate current business enterprise value, while also managing the seller’s expectations of a valuation range before going to market. So, if you are a business owner, and you plan to approach buyers without professional M&A representation, you need to understand company valuation gaps, your intrinsic risks as a seller, and how to bridge these gaps. This can require a great deal of education on your part and can be very time consuming. Or you can simply enlist professional M&A advisory expertise and have the peace of mind that the fate or your business is in the best possible hands. The best advisors will work diligently on your behalf to help you attain your goals for your business and your financial future. It requires a team with proven experience, resources, and best practices to successfully navigate the many legal, accounting, due diligence, and marketing considerations involved in arriving at an accurate and realistic company valuation and getting a quality deal done.

Engage Our Expertise

Our top-notch M&A analysts at Benchmark International can help you with your company, from creating growth strategies to selling it for maximum value. Set up a time to talk with us and we can determine what solutions are best for you and your business.

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Benchmark International Successfully Facilitated the Transaction Between Ultimate Medical Services, Inc. and UMS Holdings, LLC of WolfGang Capital

Benchmark International is pleased to announce the cross-border acquisition of Ultimate Medical Services, Inc. by UMS Holdings, LLC of the Wolfgang Capital group.

Ultimate Medical Services, Inc. is a provider of diagnostic medical imaging equipment and maintenance services for the South, Central United States market. Medical imaging equipment includes digital radiography, computerized radiography, X-rays, Ultrasound, MRI and CT. The company is a full-line imaging company that provides services for preventative imaging products as well as routine studies and emergency procedures.

Wolfgang Capital LLP purchases, develops, and manages businesses with revenues of £1 to £20 million. UK-based Wolfgang Capital is a solution-focused business committed to generating growth through acquisition.

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Kevin Fix, former owner and CEO of Ultimate Medical Services, Inc. said “Benchmark International stood with us through every step of the transaction process and we were impressed by their desire to search the globe to find a buyer. Their efforts ultimately paid off and they facilitated the close of our company with a buyer based in the United Kingdom. The Benchmark team placed a lot of emphasis on being able to help get a deal done in any condition, even despite the global Covid-19 quarantines and the subsequent economic crisis. The team’s persistence proved especially valuable in overcoming numerous obstacles ranging from having multiple potential buyers initially fall through to eventually juggling a complicated cross-border transaction to reach a successful close. Maxim Belov was particularly hands-on and helpful through every step of the sales process.”

Regarding the deal completion, Anthony Hernandez, Benchmark International Transaction Director, stated “the Benchmark Team is delighted to announce not just another successful closing, but to also announce the first transaction we have had the pleasure of facilitating in Louisiana, with several more surely following on its coattails. Senior Analyst Maxim Belov did an excellent job liaising between the parties to facilitate another cross-border transaction for the Benchmark International team.”

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2020 Apparel, Beauty & Home Furnishings Sector Update

The COVID-19 pandemic has brought about disruptions for businesses operating in the fashion, beauty and home furnishing sectors. This is because of complicated global supply chains and reliance on discretionary spending by consumers amid record unemployment levels. Keeping these types of businesses adaptive is crucial to their recovery and long-term success.

Supply Chain Disruption

“Nearshoring” is a term that describes the relocation of the production of goods so that they are moved geographically closer to consumer-dense regions such as the U.S. and Europe. This has been an attractive option for fashion and home furnishings companies, yet the cost of displacing established supply chains and vendor relationships have prevented them from making the move. But the landscape could be changing due to COVID-19, geopolitical turmoil, and antiquated supply chain practices.

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Benchmark International Successfully Facilitated the Transaction Between Hagan Heating & Air Conditioning, LLC and NearU HVAC Services

Benchmark International has successfully facilitated the acquisition of Hagan Heating & Air Conditioning, LLC (Hagan) by an affiliate of NearU HVAC Services. Hagan is a leading recurring maintenance, installation, repair, and service company specializing in residential and commercial heating, cooling, air quality control, and dehumidifying services. Hagan was founded by Paul Hagan and has been in operation for over 30 years. In addition to traditional HVAC systems, Hagan also services boilers, gas furnaces, and heat pumps.

The decision to sell Hagan was made after careful consideration. According to Mr. Hagan, “The thought of selling our 33-year-old HVAC business to actually listing it was overwhelming. After much research it was certain that we would need help. We narrowed down brokers and chose Benchmark International. The personal and professional attention we received exceeded our expectations. All members of the team provided the knowledge and expertise needed to get us from listing to closing with confidence, despite this occurring during the COVID pandemic, March-September 2020.”

Regarding their choice of suiters, Mr. Hagan added, “At Hagan, we have worked hard and honestly to always do right by our customers and employees. We chose to transition our brand to NearU because of our confidence in NearU’s vision for the HVAC industry.”

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NearU is a technician and customer-centric provider of residential and light commercial HVAC services. Hagan marks the fourth HVAC business in the NearU portfolio. Ashish Achlerkar, NearU’s Founder, Chairman and CEO stated, “Our portfolio in upstate South Carolina now boasts two strong and strategically-combined local brands: Carolina Heating Services in Greenville and Hagan Heating and Air in Anderson. We welcome the customers and employees of Hagan to the rapidly growing NearU family.”

Regarding the transaction, Senior Associate Nick Woodyard at Benchmark International stated, “We are excited to see the Hagan team begin this next chapter in the company’s legacy. It was an absolute pleasure working with Paul and Les Hagan and we’re excited to have facilitated a successful transaction.”

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2020 Business And Professional Services Sector Update

Business and professional services (BPS) firms are facing increased uncertainty amid the COVID-19 global pandemic. This climate is resulting in less investment and more reliance on revolving credit to maintain access to cash for operating expenses, and keeping priorities on payroll and workforce decisions. Companies with strong liquidity will shift to growth strategies and digital transformation. Also, with a greater need for mobility in a more remote-working world, there is a greater emphasis on cybersecurity, especially for government contractors and law firms.

Government Contracting: A Hot Market for Acquisitions

Government contracting is a significant moneymaker, especially in the United States. These firms rely on the needs of the government and the availability of financial resources for public investments. Government spending is often used to stimulate the economy during a slump. Through the first two quarters of 2020, government spending held steady, with health spending peaking along with the COVID-19 response, with billions going to national interest agencies and programs related to the pandemic.

The middle market in government contracting is comprised of several small, technically specialized service providers that offer high growth opportunities for larger companies that are seeking more capabilities and specific contract access. The pandemic slowed deal flow in the first half of 2020, but deals still happened with transactions expected to continue in the second half of the year. Private equity firms are seeking stable streams of cash flow and government contractors are relatively insulated from recession, making them a solid target for strategic investment and bolt-on acquisitions. M&A activity in the government contracting space is forecast to continue into 2021 as the sector (with the exception of aerospace) has been less impacted by the coronavirus and there is a need for more consolidation in the market.

 

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Cybersecurity is paramount for government contractors for obvious national security reasons. In July of 2020, the U.S. Department of Defense issued the Cybersecurity Maturity Model Certification (CMMC) to build upon cybersecurity best practices from established industry standards with the goal of reducing cyber-risk among its contractors. Other departments of the government will likely do the same, prompting contractors to prepare for it in advance.

The big commercial tech companies typically draw the top tech and cybersecurity talent, making it challenging for government and its contractors to attract talent and offer competitive salaries. During times of increased unemployment due to a pandemic, many skilled workers are seeking out less risky positions. Government contractors should jump on this opportunity to attract young, tech savvy talent.

Law Firms: Challenges and Opportunities

Due to the pandemic, law firms have had to deal with furloughs, layoffs, pay cuts and reducing expenses while finding new ways to boost revenues while working remotely. Liquidity equals agility in uncertain times, so firms should seek to expand their credit lines while making the most of government assistance options.

Human capital remains the single biggest asset for law firms. Working remotely has brought about new challenges for attorneys and staff as they juggle the demands of working, parenting and caregiving. Investing in programs, technology, and other ways to support staff is more important than ever. Amid cutbacks and a lack of contact with colleagues, talent needs to know they are still valued and connected to the firm’s success. Firms also need to take this time to assess what lessons have been learned from remote working regarding obstacles, delays and infrastructure needs and how they can address needs, especially in regard to digital support.

Security and privacy are major issues for law firms operating remotely as they need their files and records to be accessible from outside the office. A digital security strategy is key even once the pandemic has passed, as no one knows for sure what the new normal will look like. Once security is implemented and established, focus can shift to maintaining client relationships and creating revenue growth into the future. Investment in mentoring programs and empowerment of staff can help grow the business and identify new opportunities to support the firm once the pandemic is over and the economy is ready to bounce back.

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If you are thinking about a merger or acquisition for your business, please reach out to our M&A dream team at Benchmark International to discuss how we can help you accomplish great things.

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The Impact Of 5G On M&A

Next-generation 5G networks are widely viewed as one of the most impactful and anticipated technological developments in current times. With super-high speeds of 100 times faster than that of 4G networks, 5G is expected to bring broadband connectivity to 10 times the wireless devices and usher society into a digital industrial revolution that will open up new possibilities, innovative applications, reduced energy consumption, and economic growth.

The Impact of the 5G Value Chain on the Global Economy for 2020-2035

  • Up to $13.2 trillion of goods and services through 2035
  • $2.1 trillion in GDP growth
  • 22.3 million new jobs
    *According to a study commissioned by Qualcomm Technologies, Inc.

When Will 5G Finally Be Available?

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Should You Consider Cross-border M&A?

The world economy’s appetite for cross-border mergers and acquisitions continues to grow in popularity amid globalization and the emergence of new technologies. These types of global deals offer their fair share of risks and rewards. So how do you know if it’s the right strategy for your company? While there is no magical equation to answer that question, you can take the time to understand what you will be faced with in a cross-border transaction, how it may make sense for your particular business within your sector, and what precautions you will need to take.

Motivations for Cross-Border M&A

There are several different reasons that business leaders turn to cross-border deals to address their needs and benefit their companies. These objectives include:

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Benchmark International Successfully Facilitated the Transaction Between HireVergence LLC and Job.com

Benchmark International has successfully facilitated the transaction between HireVergence LLC and Job.com.

HireVergence, based in Tampa, Florida, is a highly specialized staffing firm providing experienced cybersecurity and IT resources to clients of all sizes nationwide. The founders of HireVergence, Mark Tuszynski, Dave Gilden, and Julio Sanchez, bring more than 50 years of combined experience in information technology.

Job.com is a digital recruitment company with a unique perspective: delivering technology and capabilities that shake up the market by bringing together a data-driven approach based in AI and machine learning with high-level human capital delivered solutions, designed to efficiently attract and retain the right talent and provide consumer-level user experiences throughout the hiring process.

According to the company’s announcement, “We're delighted with the acquisition of HireVergence, their fantastic team, and to work with their loyal customer base. This is a major step towards Job.com's vision of a digitized staffing industry, delivering a hiring experience to the jobseeker that moves away from transactions and focuses on career journeys," says Arran Stewart, co-founder, and Chief Visionary Officer.

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"We are excited to be joining forces with Job.com. Our shared vision of leveraging technology to reshape the recruitment industry will provide immense value for our customers and exciting opportunities for our team. The three of us are looking forward to continuing on the journey we started nine years ago with Job.com," says HireVergence founders Mark, Dave, and Julio.

Regarding the transaction process, Dave Gilden commented, “As founders, we were very pleased with the pipeline of qualified buyers that Benchmark was able to produce. We had multiple options to choose from, each with a unique upside to consider. Ultimately, it is highly unlikely we would have found any of these opportunities on our own.”

Senior Transaction Associate Sunny Yang Garten at Benchmark International commented, “It was a pleasure to represent HireVergence in this strategic transaction. Dave, Mark, and Julio are engaging and always responsive to diligence requests. We’re excited to see that their legacy will be preserved and enhanced through this transaction with Job.com. On behalf of Benchmark International, we wish both companies continued success.”

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2020 Industrials Sector Update

The industrials sector has had to adapt to significant disruption due to the global COVID-19 pandemic, and the challenges associated with it. While 2020 started on a very positive note with rapid growth for the global manufacturing sector, manufacturing output plummeted throughout the beginning of the year and into May due to shutdowns around the world. Output, new orders, exports, and purchases all fell to levels not seen since the 2008 recession. Many large manufacturing countries were under lockdowns into April, but restrictions were eased in May, which helped deter the overall rate of decline. In the wake of the crisis, many companies have found ways to evolve and use digital solutions to transform their business models, discovering changes that will continue to be beneficial in a post-COVID world. This adaptability is crucial to the survival and future relevance of these businesses.

Industry Highlights

  • Automation and connective worker technologies have become even more important to boosting productivity.
  • Migration to the cloud allows companies to be more flexible in dealing with disruptions.
  • The auto manufacturing industry is growing more resilient due to greater supply chain visibility.
  • For oil and gas companies, advanced digital technologies are a vital investment.

The Fourth Industrial Revolution

Industrial companies that made prior investments in digital technologies and IT infrastructure were able to operate efficiently during the earliest phases of the pandemic. The Fourth Industrial Revolution, also known as Industry 4.0, has enabled manufacturers to evolve their traditional supply chains and processes into highly interconnected systems. Leading organizations have been investing heavily in developed digital platforms specific to the industrials sector, pivoting business models towards being more software-centric. Additionally, smart manufacturing technologies are now transforming traditional manufacturing processes and paving the way into the future. More and more companies will be exploring digital technologies to enhance their flexibility and operate more innovatively. Robotics and 3D printing are among the most popular operational solutions that are expected to see continued heavy investment.

While remote work has become a relatively easy and normal option for many employees across different sectors, the industrial manufacturing sector is not one of them simply for logistics reasons. For example, machines need operators to keep them running. However, it has been demonstrated that technology can help limit the number of people needed to maintain operations. 

 

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Connected worker technologies are helping to streamline and hasten solutions. Typically, machine repairs require operators to contact service technicians, sometimes located in different facilities or at the original equipment manufacturer. Also, training new or existing workers has typically been face to face. Augmented reality is helping to eliminate in-person interaction for the purposed of repair, service and training and empowering workers to be more independent through digital on-demand access to manuals, instructions, and other resources.

While manufacturing companies tend to be more hesitant about migrating operations to the cloud, these organizations are realizing that cloud technologies enables them to move inventory, work smarter, customize products, and shift resources in much more flexible manner. The cloud is also an effective asset-performance tool that gives supervisors a remote window into facilities, production lines, and individuals.

Robotics and automation have significantly increased productivity for manufacturing processes. By replacing manual processes with automated alternatives, it helps to mitigate workforce availability challenges and reduces the impact of low-cost labor decisions.

Additive manufacturing and 3D printing continues to evolve and has shifted from the production of prototype applications to finished products. These manufacturing technologies are gaining more traction and offer efficient value chain solutions that enable on-demand production, less working capital, reduced supply chain complexity, fewer tools or parts needed, and less frequent human intervention.

The Auto Industry

Technology and connectivity is now the third most cited investment priority for the

automotive manufacturing industry. The future lies in edge computing, monitoring software, and the Industrial Internet of Things. Companies are able to collect and analyze data on site and in real time, connect applications to essential equipment, and conduct advanced monitoring and remote controls.

Another result of the pandemic for the auto industry is a need for more transparency in global supply chains. Thanks to AI, there is a shift from existing models in equipping automakers so that suppliers can use analytics to respond to changes in real time. For middle-market companies that have been known to underinvest in tech, this shift is especially important. Investment in IT infrastructure will help establish a more nimble and scalable environment, and will create more valuable data. The sequentially distributed databases of Blockchain technology are also changing supply chain management and adoption is expected to increase greatly into the future.

The Oil and Gas Sector

Digital technologies are also being adopted by oil and gas companies in order to bolster cost and operational efficiencies, improve safety, and reduce environmental impacts.

Robotics, AI, cloud solutions and Blockchain are all being used more and more to advance the industry. According to Bloomberg, oil companies are expected to spend $1.3 billion on advanced analytics alone in 2021. The big oil and field services companies with more experience aggressively adopting innovation and that are in favorable cash positions are more likely to continue investing in new tech. Human intervention is being scaled back. Maintenance procedures are being automated. Drones are being used to monitor real-time conditions and detect leaks. AI sensors are monitoring conditions such as temperature and vibration. At the same time, small and mid-size companies that were less mature coming into the pandemic are likely to focus spending on technology that helps them keep their businesses running.

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No matter what sector your business operates within, Benchmark International is here to help. Contact us to discuss how we can help you grow or sell your business for maximum value.

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Benchmark International Successfully Facilitated the Transaction Between Hall Building Products, Inc. and Reddi Industries, Inc.

Benchmark International is pleased to announce the acquisition between Hall Building Products, Inc. and Reddi Industries, Inc.

Hall Building Products provides an array of building supplies to commercial and residential works, primarily servicing customers in Oklahoma and the northern Texas region.

Reddi Industries is a Wichita, Kansas based home and commercial services company that added Hall Building Products to its growing business portfolio and geographical reach.

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Zack Stevens, co-owner of Reddi Industries, Inc. stated “Oliver with Benchmark recently helped us with a multi-state business acquisition. Throughout the entire process, Oliver did a great job keeping the deal moving and communicating with us on updates. There are obstacles in every acquisition we have completed and this one was no exception. Oliver helped us work through those to the finish line. I’d highly recommend Oliver and Benchmark.”

Benchmark International Transaction Director Anthony Hernandez noted, “The Benchmark International team is delighted to have facilitated the sale of Hall Building Products, Inc. to Reddi Industries, Inc. Reddi Industries, a family-owned and operated professional home and commercial services company, proved to be the perfect buyer for Hall Building Products, Inc. The Benchmark International team did an excellent job bringing Reddi Industries to the table to execute a swift transaction with the seller.”

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Benchmark International Successfully Facilitated the Transaction Between Sportfit Support Services Limited and Tristone Healthcare Ltd

Benchmark International is pleased to announce that it has completed a transaction between Southampton-based care providers Sportfit Support Services (Sportfit) and Manchester-based buy-and-build company, Tristone Healthcare.

Established in 2010 and incorporated in 2012, Sportfit is a specialist emergency, domiciliary and short break active care provider offering high-end support to 16-19 years olds with developmental delays, backgrounds in abuse and those with family relationship breakdowns. Sportfit offers bespoke plans for service users, providing affordable and active care. With 120 employees, Sportfit supports 502 young people.

Tristone Healthcare, owned by Tristone Capital, is a privately owned buy-and-build company that invests in profitable businesses with enterprise values of up to £20 million, have a good market share and prospects for growth, and are led by managers with both strong commercial and operational judgement.

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The acquisition will allow the combined team to support more vulnerable young people and deliver outstanding services to local authorities, said Yannis Loucopoulos, Tristone founder and CEO. The acquisition increases the number of vulnerable young people currently supported by Tristone to 98 with capacity to support 116.

Following the transaction, Managing Director of Sportfit, Ashley Vickers, will continue to manage the business and retains a minority shareholding.

Commenting on the working with Benchmark International, Mr Vickers said:

“Benchmark were outstanding throughout the sale of my business. The process took time but, Benchmark, led by the great efforts of Paul Wilson [and] supported by excellent office staff, Oliver Taylor in particular, meant the deal was completed. My best interests were at the heart of every negotiation throughout, and the intricacies of formulating and completing the deal deserve the highest praise. To say I was impressed with Paul’s efforts, and those of Benchmark, would be a huge understatement. Indebted would be a better description.”

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Benchmark International Has Successfully Facilitated the Transaction Between BTech Manufacturing Inc. and a Private Investor

Benchmark International has successfully facilitated the transaction between BTech Manufacturing Inc. and a private investor in the Houston, Texas market.

BTech Manufacturing Inc. is a component manufacturer and distributor of machined products. The company provides necessary components to the oil and gas industry, brazing stations, and other machined parts to air conditioning manufacturers and repair services. The company serves a wide array of industries such as HVAC, heavy industrial and manufacturing, and oil and gas.

BTech Manufacturing Inc. was purchased by a private investor looking to own and operate the business with the hopes of taking Mr. Bui’s foundations to the next level.

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Mr. Bui, President of BTech Manufacturing Inc. said regarding the recent transaction, “Benchmark International sourced a buyer that was motivated to get something done and pointed every party involved in the right direction. The team at Benchmark International understood my business and knew exactly what market segments to target. If I would do this again, I would without a doubt choose Benchmark as my partner in the sale process.”

Benchmark International’s Transaction Director, Luis Vinals stated, “BTech Manufacturing is a great company, and Mr. Bui’s story is one of resilience and is a testament to his entrepreneurial tenacity.  We are excited to have been able to facilitate a deal that will give Mr. Bui the flexibility to pursue his interests while maintaining his legacy.  The fact that we were able to quite literally close the chapter of one entrepreneur’s story and facilitate the opening chapter for another entrepreneur is proof that Benchmark International can work on all levels of the lower and lower-middle markets.  We wish Mr. Bui and the new ownership of BTech Manufacturing Inc. much success in the future.”

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2020 Real Estate Sector Update

The real estate industry, both commercial and residential, is undergoing transformation due to the effects of the COVID-19 pandemic. People are working from home, traveling less, and some are migrating to smaller cities. Digitalization is becoming more prevalent, as owners, developers and managers of properties are seeking out virtual and touchless solutions to ensure safety and boost efficiency in a competitive market. Middle-market companies that keep up with the demand for innovation are poised to thrive under these new-normal conditions. 

Real Estate Trends Expected to Continue

  • Office spaces are being reconfigured to offer more space for each worker.
  • Remote work is facilitating home purchases farther away from large cities that are home to corporate headquarters.
  • Virtual touring experiences are becoming standard for home sales.
  • Hotels are adapting to new measures to ensure guest safety.
  • Retail properties are being used for other commercial uses.
  • Leasing arrangements are becoming more creative to improve liquidity and cash flow.
  • The inability to have in-person property experiences are hampering due diligence efforts.
  • The construction sector will continue to employ virtual tools such as 3-D modeling and site management platforms.

 

Ready to explore your exit and growth options?

 

Remote Working and the New Office

As millions of office workers have been working remotely to help avoid spreading the COVID-19 virus, employers were somewhat surprised to see that workers were more productive while working from home. Analyses show that average workdays increased in hours and big tech companies announced that remote working would continue into the long-term future. A result of this is that companies are:

  • Looking to reduce the cost of office space.
  • Providing more space per worker for any necessary in-person collaboration.
  • Using video conferencing setups in small team rooms to bridge home and office work.
  • Implementing thermal scanners, improved ventilation, UV light for cleaning and other safety measures.

Property owners and managers of office spaces have been able to continue to collect rent payments during the pandemic. However, as unemployment rises and the economy remains uncertain, it could impact the financial markets, making property and mortgage payments more difficult. Additionally, pension fund managers for large unions often invest in office markets due to their stable rents and cash flows, but if tenants cannot pay rent, pension payments may be cut.

Residential Real Estate

Residential home buying is also changing due to the coronavirus. Prior to the pandemic, Millennials were already willing to sacrifice job opportunities to buy homes in secondary cities in search of affordable housing. A study by Redfin showed that more than 50 percent of workers in major tech hub cities would move elsewhere if their company offered a remote work option, with the desire to live someplace less expensive. New tech advancements in a more remote-work-driven world are enabling these workers to pursue both dreams. Major tech companies are recognizing the cost burden that comes with maintaining sweeping campuses in major metro areas and are leading the way in the trend to shift to remote working as more professional services companies follow suit.

How homes are being purchased is also changing. Online home shopping by Millennials was already on the rise before the pandemic, causing realtors to adapt their selling processes. Virtual reality tours and 3D floor plans are becoming standard practice. Appraisers are using drones for exterior photography. Paperwork is reduced and replaced by electronic filing and signing.

Retail Real Estate

Retail property owners have many tenants that have been forced to close due to COVID-19 restrictions and many of these tenants are refusing or unable to pay rent while closed, forcing landlords to devise workarounds and, in turn, struggle to pay their own bills. Retailers were already struggling pre-pandemic due to increasing e-commerce popularity. Now landlords are providing rent abatement periods, rent waivers, flexible payments, and interest-free repayment in order to aid in their tenants' survival.

Hospitality Real Estate

The pandemic has limited non-essential travel, as business travelers are working from home and many leisure travelers are choosing to stay home for safety reasons. The hospitality sector has taken a massive hit under these circumstances amid changing restrictions and stay-at-home orders. As economic loss negatively impacts the hospitality industry, operational priorities are shifting from personal guest experiences to the safety of guests. Economy lodging is being less affected than larger, upscale hotels because essential construction workers are still traveling to job sites in smaller markets while large conferences are cancelled and professional group business travel is being limited. Investments in new technologies by hotel operators are also crucial to the hospitality real estate industry as extensive safety measures are needed. Typical in-person processes are being replaced by digital options. Common areas are being reassessed to offer social distancing. New cleaning and ventilation measures are being implemented. These changes are expected to aid in the economic recovery in this sector.

Construction

A new era of technology is playing a major role in the construction industry. Enhanced safety protocols are being implemented in existing commercial buildings. Construction companies are embracing new technologies in the development and management of new projects. Prefabrication and modular buildings, as well as virtual construction methods, are seeing accelerated growth amid the new circumstances due to the pandemic. A recent survey showed that construction executives foresee double-digit

increases in single-trade and multi-trade prefabrication assemblies, as well as permanent modular construction, over the next few years. These construction techniques offer better project schedule performance, lower construction costs, and improved construction quality.

Considering M&A?

No matter what sector your business operates within, our M&A experts at Benchmark International are eager to discuss your future with you, whether it’s selling your business, growing your company, or devising your exit or succession plan.

 

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