In our experience, business owners who have identified the one party—or handful of likely parties—on the other side of the table often understand they need assistance beyond what their other advisors will provide, but wonder what an M&A advisor will do to add value. This is a case of “raising the bridge and lowering the water.” We’re able to attune our offering to the one-off transaction because it is our primary focus, not one we default into. And, we can charge less than traditional investment banks because we are not required to utilize and pay for the platform required to execute on full-out auctions.
I’ve been an investment banker since 1995. Over this period, a handful of trends have come to define the sale of a private business—market-clearing auctions, the emergence of the adjusted EBITDA multiple as the primary valuation benchmark, and the widespread use of outsourced financial due diligence.
All of these developments reflected and contributed to what has been a period of elevated valuations, but it is not like any of them were on tablets handed down from a mountaintop.
They all were at a different place 30 years ago...
Back in early September, GF Data managing director Bob Dunn and I published an article describing the bifurcated state of the M&A market— not a new concept, but we wanted to show that the lines of demarcation between above-average performers and other businesses have become more pronounced, as well as more complex, (full article)
Over the past six weeks, several points we put forward as conjecture have further crystallized as market reality. Based on client interactions at Greenberg Variations Capital, discussions with other deal professionals and a continued view of the data, here is my sense of where we stand heading into next year...
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