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Current M&A Outlook Into 2023

In 2021 and early 2022, we saw record-breaking levels of M&A activity in the United States and around the world, and many business owners are wondering how long this cycle
will last.

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Global Artificial Intelligence Industry Update

The global artificial intelligence (AI) market was valued at $93.5 billion last year and is forecast to expand at a compound annual growth rate (CAGR) of 38.1% between 2022 and 2030. AI is proving to be a transformative factor in today’s digital era and is being applied in every area possible, from self-driving cars to life-saving medical equipment. The big tech giants continue to invest in research and innovation that is driving the adoption of advanced AI technologies in industry verticals, including healthcare, finance, automotive, retail, and manufacturing. AI offers better efficiency, and many companies are also adopting AI technology to offer better customer experiences.

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Global HVAC Industry Report 2022

In 2021, the global heating, ventilation, and air conditioning (HVAC) market was valued at $156.44 billion. The market is expected to be valued at $231.11 billion by 2027, expanding at a compound annual growth rate (CAGR) of 6.72% between 2022 and 2027.

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Benchmark International Facilitated The Acquisition Of B. Carlson Heating & Air By Radiant Plumbing And Air Conditioning

Benchmark International's client, B. Carlson Heating & Air Conditioning, a provider of HVAC and Plumbing Services, has been acquired by Radiant Plumbing and Air Conditioning, a Texas-based portfolio company of The Riverside Company.

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Benchmark International Successfully Facilitated A Transaction Between D.T. Woodcrafters Corp And Hollywood Woodwork, Inc.

Benchmark International has successfully facilitated a transaction between Hialeah, Florida-based D.T. Woodcrafters Corp (“Woodcrafters”) and Hollywood Woodwork, Inc. (“Hollywood”), headquartered in Hollywood, Florida. Woodcrafters creates custom woodwork for a high-end customer base that includes banks, offices, restaurants, hotels, and homes. For over 25 years, the team’s craftsmanship has allowed it to distinguish itself in South Florida. Hollywood is one of the nation’s premier millwork and casework companies, with over 150 employees and a leading position in the Florida market.

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Don't Miss Our Deep Dive Into Strategic Buyers

One of our Managing Partners at Benchmark International drafted an exclusive publication detailing many of the attributes that are unique to strategic buyers and how those attributes can impact   business owners in the sale of their business. 

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Benchmark International Successfully Facilitated The Transaction Of Huco Consulting, Inc. and Montrose Environmental Group, Inc

Benchmark is pleased to announce the transaction between Huco Consulting, Inc and Montrose Environmental Group, Inc. The reasons for targeting were strategic expansion and the added value that Huco would bring to the table.

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Benchmark International Successfully Facilitated The Transaction Of A Collection Of Jimmy Johns Franchise Restaurants To A Private Investor

Benchmark International is pleased to announce the acquisition of 6 Denver metro Jimmy John’s franchise restaurants, known as Rupp Enterprises, to a private investor.

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Benchmark International Successfully Facilitated The Transaction Of A Coastal Packaging And Lachemont Group.

Benchmark International successfully facilitated the transaction of Coastal Packaging and Lachemont Group. Coastal Packaging is a custom packaging and liner covers company offering turnkey, flexible packaging specializing in plain and printed roll stock for form fill and seal machines, open mouth bags, custom fit container liners, and pallet covers. They have flexible minimum runs, which is an advantage.

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Benchmark International Ranked #1 Sell-Side-Exclusive M&A Firm In The World By Pitchbook

Pitchbook has released their Q3 2022 global league tables, and Benchmark International remains an esteemed leader in the M&A world.

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TRADE SALE OR SALE TO EMPLOYEES (IN THE UK)?

Introduction

There has been significant growth in the number of Employee Ownership Trusts (EOTs) in recent years, and in this article I explore some of the differences between shareholders selling to a trade buyer and selling to a trust set up for this purpose.

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Benchmark International Successfully Facilitated The Transaction Between ProMaxx Tool And Milton Industries

Benchmark International is pleased to announce the acquisition of ProMaxx Tool by Milton Industries.

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Benchmark International Facilitated The Transaction Of Spatial Acuity, LLC And Bowman Consulting Groups Ltd

Benchmark International successfully facilitated the transaction of Spatial Acuity, LLC, to Bowman Consulting Groups LTD, hereinafter referred to as Bowman. Spatial Acuity, LLC is headquartered in Austin, Texas. The company provides high-definition scanning, 3D modeling, and reality capture services for owners, developers, and operators of private and public infrastructure. Utilizing advanced geomatics equipment, Spatial Acuity delivers interactive, three-dimensional digital models, thrusting their clients to the forefront of the digital twin revolution.

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Benchmark International Facilitated The Transaction Of ProCon LLC And Southwest Material Handling Inc.

Benchmark International successfully facilitated the sale of ProCon LLC, hereinafter referred to as ProCon, to Southwest Material Handling Inc. ProCon, headquartered in Las Cruces, New Mexico, is an award-winning exclusive dealer of JCB construction equipment and a provider of value-added service and parts. ProCon operates in the western region of the US, including Colorado, Arizona, New Mexico, Texas, and Nevada.

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Benchmark International Facilitated The Transaction Of Seasons Home Health Care And Jetre. A Schuler

Benchmark International successfully facilitated the transaction of Seasons Home Health, which consists of a group of four entities. The entities provide personal home care to children, elderly, or disabled patients in Southern Texas. Located in the Rio Grande Valley, Seasons Home Health helps individuals in need of personal home care to live securely and comfortably in their own homes.

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Benchmark International Successfully Facilitated the Transaction Between Quantum3 Aluminium Limited and Burke Porter Group

Benchmark International is pleased to announce the acquisition of Killaloe-headquartered Quantum 3 (Q3) by Michigan-based Burke Porter Group (BPG).

Watch the video testimonial here.

Established in 2000, Q3 manufactures a range of lean and flexible aluminium profile and framing systems, featuring patented connector blocks, for manufacturers in the medical and life sciences industries. Leveraging its unique modular flexible aluminium profile and framing systems, the company designs lean assembly and production line solutions that enable customers to optimise their workflows and realise process improvements in cleanroom and other demanding environments.

Over the last 20 years, Q3 has served clients in Ireland, the U.S. and Costa Rica.

Founded in 1953 and headquartered in Grand Rapids, Michigan, BPG is a leading global supplier of automated diagnostic, testing and production solutions serving life science and speciality industrial end markets. BPG focuses on automating high-precision processes, leveraging its capabilities in microfluidics, optical design, additive manufacturing, motion control and software to develop solutions tailored to its customers' needs.

BPG maintains close proximity to its worldwide customer base through a global footprint of 45 locations to provide responsive and local supply, service and support.

Ready to explore your exit and growth options?

Following the acquisition, Q3 founders Pat Hayes and Paul McGrath will remain with the company, working closely with the BPG leadership team and Rich Carone, who leads BPG's Medical and Life Sciences Division.

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Benchmark International Facilitated The Transaction Of Stria, LLC And Bitwise Industries

Benchmark International successfully facilitated the transaction of Stria, LLC, to Bitwise Industries. Stria, LLC. The company works with key third-party platforms to provide classification-as-a-service (CaaS), content service platform support, workflow automation, document scanning, records management, and reprographics services.

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What is Net Working Capital?

What is Net Working Capital?

Introduction

Working capital also called net working capital, measures a company's financial security. According to Jensen and Meckling, authors of the new famous Theory of the Firm (1976), the components of working capital measure the firm's shareholder value. Working capital helps evaluate a company's short-term health, liquidity, and ability to invest and grow its operations. Working capital is defined as current assets less current liabilities. Current assets often include cash, accounts receivable, customer unpaid bills, and inventory, with current liabilities encompassing accounts payable and short-term debts, to name a few.

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What Is The Denominator Effect?

When it comes to selling your business, and you are considering waiting or pausing, there are several factors to consider, such as market conditions and interest rates. But there is also something called the denominator effect.  

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Benchmark International Facilitated The Sale Of Lloyd Lauw Collision Repair Center To Gerber Collision & Glass

Benchmark International is pleased to announce the acquisition of Lloyd Lauw Collision Repair Center to Gerber Collision & Glass.

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Benchmark International Facilitated The Transaction Of Metro-tech Electrical Contractors, Inc. To Michael Bowman

Benchmark International successfully facilitated the transaction between Metro-Tech Electrical Contractors, Inc. and Michael Bowman.

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Benchmark International’s Brittney Zoeller Wins Emerging Leaders Award

The M&A Advisor announced the winners for its 13th Annual Emerging Leaders Awards, and Benchmark International's Global Creative and Brand Strategy Director, Brittney Zoeller, is among the winners.

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The Public-To-Private Trend For New Paths To Growth

Many individuals at large institutions that trade in the public markets are turning to private ownership and pursuing majority equity positions in lower middle-market companies and even creating their own funds. This public-to-private trend is partially being driven by current and expected public market volatility over the next few years, combined with individual business circumstances, all with the expectation for a brighter future. The recent stock market instability is presenting attractive opportunities for companies that may perform better in the private market. Private equity and private investors have ample capital available to them at a time when public market valuations are sinking. The interest is coming from both private equity funds and strategies, as private markets are gaining ground on public markets. Take-privates are on pace for the second year in a row at $100 billion or more in deal value. That is a first for the industry in more than a decade.

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Benchmark International Awarded Corporate / Strategic Deal Of The Year ($10MM - $25MM)

Benchmark International was awarded Corporate/Strategic Deal of the Year ($10MM - $25MM) for the transaction of Performance Equipment to Mid State Restoration in The M&A Advisor's 21st Annual M&A Advisor Awards.

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Benchmark International Awarded Cross-Border Deal Of The Year ($10MM - $25MM)

Benchmark International was awarded Cross-Border Deal of the Year ($10MM - $25MM) for the sale of Summus Group to Sia Partners at The M&A Advisor’s 21st Annual M&A Advisor Awards.

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Benchmark International Named Leading Specialist M&A Advisory Firm Of The Year 2023

Benchmark International has been named Leading Specialist M&A Advisory Firm of the Year 2023 in the United Kingdom by Acquisition International's Leading Adviser Awards.

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­­Benchmark International Is Pleased To Announce The Transaction Of Chustz Surveying, L.L.C. And GIS Engineering

Benchmark International is pleased to announce the transaction between Chustz Surveying, a Louisiana-Based Surveying Company, and GIS Engineering, a professional service firm across five locations in Louisiana.

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Benchmark International Facilitated the Transaction of NMC Exteriors and Remodeling to Gauge Capital / Apple Roofing

The seller, NMC Exteriors, is a Minneapolis, MN based residential and commercial roofing and siding provider with 20+ years serving homeowners and businesses in the greater Minneapolis area. NMC’s commitment to quality has propelled them to be a market leader in their community.  They have achieved an A+ accreditation from the Better Business Bureau and have been awarded the Platinum Preferred Contractor by Owens Corning.

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Benchmark International Successfully Facilitated a Transaction Between Paramount Urgent Care, Inc. and HCA Healthcare.

Benchmark International has successfully facilitated a transaction between Florida-based Paramount Urgent Care, Inc. (“Paramount”) and HCA Healthcare, headquartered in Nashville, TN. Paramount operates six urgent care clinics in Central Florida, with locations in Clermont, The Villages, Oviedo, Orlando, Casselberry, and Windemere Villages. 

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Benchmark International Ranked in Factset’s Global League Tables

Benchmark International is pleased to announce that it has ranked in FactSet’s Flashwire Advisor league tables for the number of deals it has conducted in the UK, Europe and globally in Q3.

In the UK, Benchmark has placed 8th, among companies such as BDO, Grant Thornton, KPMG, and PwC.

Meanwhile, for Europe, Benchmark has placed 23rd, and has ranked 40th globally.

Looking for a Corporate Finance Adviser? 

FactSet Mergers covers all deals where the buyer and seller are disclosed and the transaction involves the sale of at least 5% stake in a business, with some exceptions for impactful or high value deals.

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Why Competition Matters

How will running a competitive bid process help me?

The lower middle market remains very active, and we anticipate that this trend will continue for the foreseeable future. If you are a business owner, you have probably received unsolicited interest and perhaps even offers for your business. There is a lot of money chasing few deals, so buyers are looking to find off-market deals to build their pipeline and purchase a business below market value to boost their investors’ returns. Having additional buyers at the table tends only to benefit the seller.

When a buyer uncovers an off-market deal, they are often in a better position to buy the business at a discounted price than what they would pay in a formal auction or open bid process. Buyers seek acquisitions to help solve a problem or hit an ROI benchmark. If the buyer can purchase a business below market, then the buyer ends up winning both in the current transaction and future transactions. The business owner is the one who tends to have seller’s remorse. Our team commonly speaks with buyers who will not participate in auction processes because they do not want to pay top dollar, and those buyers know that they are not willing to do what it takes to win the bid.

If you have ever watched an episode of Shark Tank when all the sharks are bidding on an opportunity, you have seen how a competitive bid process can benefit the company pitching to the sharks. When Lori Greiner, Barbara Coroan, Robert Herjavec, Daymond John, Kevin O'Leary, or Mark Cuban share an interest in an opportunity, it often piques the interest of another shark who wants to jump in and try to win the bid. Sometimes, the sharks even go into the deal together. This process also happens for deals within the lower middle market. When two buyers go into a deal together, they are called co-investments. In this case, two can be better than one. However, you will not know if co-investments are an option until you go to market and run a process.

When a seller receives an offer from an unsolicited party, the offer only reflects one party’s view of the value of the business. Businesses are comprised of both tangible and intangible assets. That is, the value of the business lies not only in its tangible assets like machines and inventory but, perhaps more importantly, in the quality of its people, process, customer base, and intellectual property. Acquirers buy businesses for many reasons, including for geographic expansion, product line development, talent acquisition, and competitive advantages, to name a few. Why is a business worth 5x to one buyer but 7x to another? A business's real value is the opportunities an acquirer has post-closing. Ultimately, the only way to know if the offer in hand is a representation of the market or even the best option for the business owner is to explore multiple views of the value of the business.

Ready to explore your exit and growth options?

If you move forward with the one offer available, what will you do if the deal falls apart during due diligence? Due diligence can be a time-consuming and overwhelming process. If you go through the due diligence process and the deal is unsuccessful, what? You will not have a second or third option. The sale process can be very emotional. Often, when a deal closing is not successful, a firm that ran a bid process will typically have a handful of bidders that they are able to re-engage to work toward a successful closing. The deal team can utilize the initial data request and due diligence process to make the workload lighter the second time around. An experienced M&A deal team will be able to craft a strategy to target active buyers from previous efforts and bring them back to the table. However, if you only have one option, you must start over from the beginning. By the time you start over, you are at risk of missing the market, which might cost you tens of millions of dollars.

The other great aspect of running a bid process is that you have leverage during due diligence. Typically, when a letter of intent is signed, the negotiation power shifts from the seller to the buyer. If you have other suitors waiting in the background, an experienced M&A deal team can use that competitive tension to help a seller secure the best deal on the market and keep the buyer in check. The buyer who ultimately wins a formal auction process knows that there were other suitors competing for the bid.

It is crucial for any seller considering a sale to hire a capable sell-side M&A firm to take them to market. A dedicated sell-side team virtually assures you that you will have multiple suitors and bids. You will be able to see several different views on the value of your business and be able to determine the optimal deal structure. The process will allow you to explore other partnerships and understand what competitive advantage various firms can bring to the table. If you compare the company sale process to dating, it is good to know what other suitors offer so you can pick the best one for you! Having an experienced M&A team take you to market to uncover your best options will give you the peace of mind that you have the information you need to make the best decision for you and your business.

  Author
  Kendall Stafford
  Managing Partner
  Benchmark International

  T: +1 512 347 2000
  E: STAFFORD@BENCHMARKINTL.COM

 

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Benchmark International Facilitated The Transaction Between Impact Communications And Imagination Works, Inc.

The seller, Impact Communications, is a Cleveland, OH-based full-service production company specializing in in-person and virtual event experiences, video production, museum and exhibits, and interactive applications. With over 40 years of providing services to some of the largest brands in the country, Impact Communications has established a stellar reputation for delivering quality projects.

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Benchmark International Successfully Facilitated the Transaction Between We Are HydRogen Ltd and PA Media Group

Benchmark International is delighted to announce the acquisition of Glasgow-based Hydrogen by London-based PA Media.

Established in 2016, award-winning Hydrogen is the largest social media agency in Scotland, specialising in social media management, B2B and B2C content creation, community management, paid advertising, research, and insights.

The company has delivered significant year-on-year growth since its formation and has worked with clients across the publishing, utilities, FMCG and hospitality sectors, including The Economist, Highland Park, SSE and Magners.

PA Media is the UK's leading provider of multimedia content and services. The group comprises a diverse portfolio of specialist media companies, spanning news and information, technology, and communications services.

Ready to explore your exit and growth options?

PA Media Group has 20 shareholders, who are mainly UK news and media businesses. The largest shareholders include DMGT plc, Informa plc, News UK plc and Reach plc.

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Benchmark International Facilitated The Transaction Between Central Hydraulics And Sbp Holdings.

Benchmark International has successfully facilitated a transaction between Florida-based Central Hydraulics, Inc. (“Central”) and SBP Holdings of Houston, Texas. Founded in 1983, Central is a distributor of hoses and other products that also operates full-service hydraulic sales and repair shops. Central maintains five locations in Daytona Beach, Cocoa, Leesburg, Ocala, and Tampa. SBP Holdings, the country’s no. 2 hose and accessories distributor, maintains a footprint of approximately 85 locations and 1,000 employees.

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2022 Global Digital Advertising Industry Report

The digital advertising sector is also often referred to as online marketing, Internet advertising, and web advertising. The market includes revenues gained by advertising activities conducted by organizations targeting consumers via Internet-enabled mobile devices and personal computers.

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Benchmark International Successfully Facilitated The Transaction Between Peacock Sales Company, Inc. And An Undisclosed Buyer

Benchmark International has successfully facilitated the transaction between Atlanta-based Peacock Sales Company, Inc. (“Peacock”) and an undisclosed buyer.

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Benchmark International Awarded International Gamechanger™ Progress Champion For Race And Culture Equality

Benchmark International was named International Gamechanger™ Progress Champion for Race and Culture Equality in the 2022 ACQ5 Global Awards.

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Don’t Miss Benchmark International’s Newest Edition of The Mark

Benchmark International is excited to release our latest in-house publication of The Mark, Vol. XXI.
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Benchmark International Facilitated The Transaction Of A Janitor’s Closet And Envoy Solutions

Benchmark International is pleased to announce the successful transaction between A Janitor's Closet and Envoy Solutions.

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Big Data & Cloud Storage Security Industry Report

Global Big Data Security Market

The global big data security market was valued at $24 billion in 2021 and is projected to reach $115 billion by 2030. That is a compound annual growth rate (CAGR) of 19% over the forecast period of 2022 to 2030. North America led the global market and is expected to grow at a CAGR of 17.5%.

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