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US Middle Market M&A Market analysis

Huxley Nixon - Friday, October 21, 2011

Robert W. Baird & Co. - Baird - M&A Global Monthly for September 2011 is the best analysis I have seen on the current state of the M&A Market.  While trends are down globally, the US is better off than the UK and India.  Pages 5 through 9 deal exclusively with the US Middle Market.

After a strong market through July 2011, US M&A activity has slowed dramatically.  However, the US Middle Market (Transactions less than $1BN) showed mixed results in September 2011 versus September 2010 Total number of deals was up 4.5% but dollar volume of transactions was down substantially. Baird’s research provides a comprehensive summary analysis of all M&A Markets and breaks it down in a very easy to understand format. It not only measures number of transactions and their dollar value, it also provides insight into pricing metrics such as multiples of EBITDA, Revenues and provides data on how buyers are paying for target companies (cash vs. stock) and the number of Strategic vs. Sponsor (pvt equity/VC), etc.  The best metric to look to determine future trends are the LTM numbers….

Read more...

 

IPO Pipeline at RECORD level at end of Q3…

Huxley Nixon - Friday, October 21, 2011

Most of the IPO activity in Q3 closed in July and the number decreased 51.5% from the Q3 period in 2010; however, the number of companies in the que at the end of Q3 are 181 versus 133 at end of Q3 2010, a 36.1% increase.  Technology and oil & gas companies lead the way.  Is this RECORD pipeline good or bad for these registrants?

 “The US IPO pipeline is full and primed for companies to go public in Q4 despite continued market swings and volatility according to Ernst & Young’s US IPO Pipeline Analysis.  The update, reported during the third quarter 2011, showed that Technology and Oil & Gas companies combined accounted for 48 percent of the IPO registration, and when the market regains its footing, these sectors will likely dominate IPO activity….”   Read more….

Home-Builder Confidence UP!

Huxley Nixon - Wednesday, October 19, 2011

Finally - some good news for home-builders.

“Home-builder optimism climbed to the highest level since the federal home-buyer tax credit started in April 2010, according to the latest National Association of Home Builders index.”  Read more...

Pitfalls of failing to create a Competitive process

Huxley Nixon - Wednesday, September 28, 2011

"When buying a new car do you pay the “Suggested Retail Price” of the dealer?  If so, you NEED to read the actual case study for my new business – the M&A MARKETPLACE by CHC℠ or you may pay 10 to 30 percent more than you should." " ..... WHY do so many business owners of private companies end up selling to a “friendly competitor” or a financial buyer in a “negotiated” transaction?" 

Huxley Nixon, founder of the M&A MARKETPLACE by CHC, relates the actual events surrounding the efforts of Bob (not his real name) to sell a majority stake in his company, remain as CEO and buy his largest competitor. Bob's company was a very profitable $220 million revenue value add distributor but he refused overtures from numerous investment bankers to help.

Bob had elected to control this process internally and signed an LOI ("Letter of Intent") with a strategic buyer for $100 million but realized quickly that there was not a culture fit and he was NOT going to be a "partner" with the new owner, rather an "employee".  Next, Bob agreed to a term sheet from a well known private equity firm offering a price of $115 million.  Unfortunately, they were unsuccessful in raising their latest fund and could not perform.  Click here to for the rest of the story....

 


Common MISCONCEPTIONS about Private Equity dispelled!

Huxley Nixon - Wednesday, September 28, 2011

Recent study of Private Equity by the international strategic consulting firm, BBK dispels many misconceptions held by business owners. 

The days of using high leverage and “buy and flip” are over!  According to David Knill, lead managing director of BBK's Private Equity Practice, it's a good time for many companies to consider the substantial investment and savvy management resources PE firms can provide.  “….BBK has determined that many PE investment firms are stable, long-term owners that quietly introduce efficiencies to improve a company's performance and help it expand.”  To read recent Marketwatch article Click Here.

Seven Reasons to Sell NOW!

Huxley Nixon - Tuesday, September 20, 2011

Excellent article by John Warrillow on why NOW may be the time to consider a sale if you are on the fence.  Click here to view John's article.

This message is critical for business owners to read who might be remotely considering a sale of part or all of their company in the next decade. I have been singing this tune for a while (see Huxley's Blog of July 27, 2011"When  is the Best Time to SELL?" - click here to view).

President Signs Debt Bill - Now What?

Huxley Nixon - Monday, September 19, 2011

Congress and the President just kicked the can down the road and many feel the signs are mounting we are slipping into a Double-Dip recession. Read more about this in Huxley's blog.

Ten Key Industries that will decline - even after the economy recovers!

Huxley Nixon - Monday, September 19, 2011


Recent report by IBISWorld identifies the top TEN DYING Industries and the factors that place them in this category.  Toon van Beek, Senior Analyst reveals some obvious and not-so-obvious sectors as well as some surprises as to major investors that have large positions in them.

 Click here to see the report.


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