By many expert predictions, we are sitting on the cusp of the next M&A up cycle. The numbers so far this year, based on a variety of sources, are all pointing to the same thing: The next 18-24 months could outpace the prior merger and acquisition spikes prior to the Great Recession.
This message was supported recently by Jeremy Grantham, co-founder of GMO (a privately held global investment management firm servicing clients in the corporate, public, endowment, and foundation marketplaces) and a well read and well known expert in the world of investment management.
He recently released his latest quarterly newsletter that is sent to all of GMO’s clients. In the newsletter he addressed what he anticipates for mergers and acquisitions throughout the next several months, as reported by Business Insider:
“In this letter, Grantham commits some time addressing the current M&A boom that we have been witnessing this year. He actually believes the next leg of this boom could be a truly historic one. ‘Don’t tell me there are already a lot of deals,’ he writes. ‘I am talking about a veritable explosion, to levels never seen before.’ "
His expectations are in line with what others are saying as well. As we have explored in the past, 2014 is shaping up to be a record year for M&A transactions worldwide, especially in the U.S. The reasons, according to Grantham, are clear:
And based on all of these factors, he is expecting the following: “I think it is likely (better than 50/50) that all previous deal records will be broken in the next year or two."
As you can see from the following chart, the last peak in deal value was 2007 and the last peak in deal volume was 2011:
Mr. Grantham is predicting both will be eclipsed in the next few years!
Only time will tell if he is correct. The bottom line for business owners to be aware of today is that buyers are active and are looking for well run, profitable companies. If you own one, you better be prepared for the eventual call from a buyer.
To be prepared, you need to have a good understanding of the merger and acquisition process. To help you out with that, Generational Equity holds complimentary, no-obligation, educational M&A workshops throughout North America on a regular basis. To find out when we will be in your region next, call us at 877-213-1792.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2014 Generational Equity, LLC All Rights Reserved
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Wealth Advisors’ affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Wealth Advisors to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Wealth Advisors is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.