Mergers & Acquisitions Industry Research

2014 is on track to be a perfect storm for mergers and acquisitions activity, as valuations are staying strong, sellers are gaining greater leverage and baby boomer retirement is driving sellers to market. Many of these baby boomers have delayed retirement for several years due to the recent economic recession that significantly impacted many retirement nest eggs. Today, there are more sellers in the marketplace, a larger buyer pool and more aggressive financing.

Retirement is the number one reason driving sellers to market in all sectors, although burnout is a significant issue for many businesses under $500,000.

Year-over-year, industry multiples have stayed flat in every quarter, and range from generally 2-3 times earnings for businesses priced at $2 million or less. Deals closed faster in recent quarters as M&A activity has picked up, with businesses generally taking 3-6 months to sell in the sub $2 million category.

When it comes to marketing, it is helpful to know where your target market is located. If you are a small company (sub $500,000), you have almost a 75% chance of finding your buyer within a 50 miles radius of your business.

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