Trend #1: Private Equity/Family Offices as Buyers
The dynamic of investing in private businesses rather than the stock market is now driving a good portion of mergers and acquisitions Sales in the United States today. (Interest rates are certainly not the driver, though they will go down some with this being an election year.) Private Equity and Family office Buyers loom large in the M&A business in 2024. This is significant for sellers as it creates competition in the buyer market and provides sellers with a larger buyer pool when it’s time to exit strategically and sell.
More qualified buyers, many of whom are already cashed up and do not have to borrow the money to make acquisitions are aggressively seeking deals right now with a determining factor now being EBITDA of $500,000 and up. It was not so long ago that the target figure was $5,000,000 and before that, most of the Private Equity firms we interacted with; their target was $10,000,000 EBITDA. This is a significant positive for owners looking to sell. There are buyers looking to buy healthy businesses nationwide in 2024.
Trend #2: Lending is Tougher
Bank Underwriting, Covenants and Interest Rates in 2024, all make for a tougher lending environment. This has translated into sellers now seeking more seller financing than we have seen previously. Expect this trend to remain while interest rates remain near this level.
Trend #3: Experienced Advisors are No Longer Optional
Navigating the entire process of selling your business in 2024 is more nuanced and detailed in 2024. An experienced Sell Side Advisor with a robust network of Strategic Buyers, Private Equity Buyers, and Family Office Buyers is a difference maker in this environment in securing the highest sale price at the best terms for the sale of your business.
Trend #4: Your Team Matters
Selecting your Go to Market Team carefully is important. Work with an experienced mergers and acquisitions attorney already aware of the typical areas within the legal agreements that will need to be carefully negotiated. Securing the very best legal terms possible is a big part of what Burgeoning enterprises consider a win for our clients. We work with experienced and highly skilled M&A attorneys and can refer you to attorneys you can select between and be confident in throughout the negotiation of legal terms for the sale of your business.
Trend #5: Macroeconomics are Driving Business Owners to Sell
Middle Market Business Owners in 2024 ARE IN FACT paying attention to
macroeconomic issues driving our economy. Most are acutely aware of the historic and disastrous level of debt our political leaders have exposed Americans to today. Entrepreneur-Business Owners are very concerned about not only the country’s debt, but also to the other driving policy factors including monetary policy, immigration, foreign policy and our current lack of energy independence which catapulted us into the current state of inflation.
Macroeconomic considerations along with the aging population of America’s middle market business owner population are driving many of the decisions for owners to sell in 2024. There is also real concern about the upcoming Presidential election and implications and dynamics that will follow that outcome.
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