Current market conditions are making it a very attractive and opportune time to consider making accretive acquisitions as part of a company’s overall growth strategy. An active acquisition strategy, as adopted by most every private equity group, provides a quick way to enhance market share, expand geographically and/or products and service lines, leverage synergies and obtain management talent; all focused on building shareholder equity value. Factors making the current environment so attractive include:
- Low interest rates and lenders actively seeking new loan growth making financing terms highly competitive with financing readily available.
- A large universe of mature business owners (prospective sellers and acquisition targets) who have been deferring the pursuit of exit strategies. What they have not been able to defer is continual ageing. Many of those owners are now preparing to take action in anticipation of corporate and personal taxes being lowered and with an expectation that interest rates will be on the rise, thus making fixed rate investment returns more attractive for investment to replace income from the business when investing proceeds from a sale.
- Expectations of strong economic growth for the next 2-3 years before the risk of entering into another recession occurs This creates a compelling window of opportunity for exit for ageing owners who fear the thought of having to ride out another recession. For most this is not an option or palatable.
Larger companies, having formal corporate development departments, are already starting to actively look for accretive acquisitions as a way to ramp up, quickly gain market share, enhance profitability and build shareholder value. For smaller companies, however, who do not possess or cannot justify having a full-time formal corporate development department, or are not versed in making acquisitions, the thought of an acquisition strategy may be daunting. This can lead to trying the one-off approach which can often times lead to time spent on a lost cause or settling for an investment that is not ideal, since there is nothing to compare. The alternative is proactively and methodically developing specific criteria, researching and seeking acquisition candidates that meet the criteria, contacting each, and then selectively pursing those which are most attractive and accretive. That is where Windward Advisors can help.
Windward’s Acquisition Advisory Services – download pdf
Windward Advisors, LLC provides those types of outsourced corporate development advisory services and is pleased to explain how it functions in that capacity, the scope of services it offers, and the benefits to be derived. The following link discusses these activities in greater detail and inquiries are welcomed.
If you are interested in learning more, please contact us for a no cost and no obligation consultation.
Steve Howell showell@towindward.com or Barry Johnson bjohnson@towindward.com
Managing Directors
(804) 784-7191