Now that the economy has hit a certain level of stability, it may be time for baby boomers to revisit selling their companies. At the end of 2012 and with a strong surge in 2013, we saw a rush of baby boomers put their companies up for sale. The general sentiment heard from the baby boomers was that they did not want to go through an economic down turn again while at the helm of a company, especially since they were actively contemplating retirement.
Buyers were also beginning to feel confidence in the improving economy and they were willing to loosen the purse strings a little to accommodate those that wanted to sell, but buyers still wanted fire sale deals.
Two years later we look back and see that 2014 was another great year for selling a company and multiples paid for those companies sold have continued to increase. The year 2015 started even stronger than the year previous for mergers and acquisitions.
One factor that makes this an opportune time for buyers is that interest rates remain low. We have had these low rates for unusual number of years and there are plenty of analysts saying that such low rates can’t continue forever. Many buyers are looking to buy their first company or expand their current business operations while the cost of capital remains low.
Another significant factor driving business sales at the lower end of the market is how the job market continues to lag. Rather than jump from company to company to increase one’s earnings, many are looking at starting a business, buying a franchise, or purchasing an existing business.
All these factors make for a rich market of opportunity for sellers and buyers. If you want to buy or sell a company, let us team up and find the best opportunity for you.