Category Archives: Mergers & Acquisitions

What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast

 

Key Takeaways:

  • Even though boomer-owned companies may flood the market over the next decade, strong businesses will most likely still find little difficulty in selling.
  • Deciding to sell can be the longest part of the selling process. After that, should take roughly three to six months to prepare the business and an additional three to six months to market the business and negotiate and close a deal.
  • As a seller, it’s important to be realistic about your business. Deal advisors like investment bankers, lawyers and accountants can help clean up the presentation, but they cannot build an entirely new company.
  • Because selling a business should result in swapping the source of the owner’s income from a business to investments, personal advisors like lawyers and wealth managers can do a lot to create an efficient transition.

Continue reading What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast

Advertisements

What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast – Part 1

Key Takeaways:

  • The sale of Southern Tool Steel supports several trends found in the Investment Banking South market survey, including:
    • Manufacturing is particularly strong in the Southeast and is an especially attractive sector to the M&A market.
    • There is a lot of money from outside the region looking for deals in the Southeast. Money is willing to travel to the region because prices are inflated in other parts of the country.
    • There is a lot of money chasing a few quality deals in the region, and it’s a seller’s market.
  • Even if a company has a few blemishes, it’s still a great time to sell if the business is properly packaged and the owner is emotionally ready.
  • Despite interest in the Southeast from investors across the world and advancements in communication tools, proximity can still matter and give local investors an edge.

Continue reading What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast – Part 1

No Geographic Barriers for Middle Market Companies in Florida: An Interview with Glenn Oken

Glenn Oken is a managing director at Mangrove Equity Partners in Tampa, FL, where he focuses on originating deal opportunities and qualifying acquisition candidates. Glenn has been a private equity investor focusing on the lower middle market for 27 years and has completed 129 transactions across 57 different niche industries.

Key takeaways:

  • For lower middle market companies in Florida, there are no longer geographic barriers. Money is willing to travel.
  • However, capital for startup companies may more commonly find seed funding through local angel groups and investors. Once they prove their business model they tend to attract interest from local investors, or from the start-up focused areas of the country.
  • Face-to-face meetings are essential in M&A deals. While numbers are important, relationships are key. In-person meetings give both sides an opportunity to assess the character of a potential partner.
  • As equity partners seek out lower middle-market companies, they look for those whose products or services are essential, non-cyclical and non-commoditized. Often, this ends up being companies with some measure of engineering content, customization, or technical capability who offer mission-critical products or services.
  • Thanks to the strength of the manufacturing and industrial services sector, the South may be one of the best regions for investors focused on those industry categories.
  • The M&A market has not yet seen a sudden mass exit by Baby Boomers. Multiple factors, not just age, are involved in an exit decision. Thus, deal volume seems to have followed a natural cycle over the years, rather than a sudden deluge of exiting Baby Boomers.

Continue reading No Geographic Barriers for Middle Market Companies in Florida: An Interview with Glenn Oken

A Seller’s Market in South Carolina: An Interview with Melinda Davis Lux

Melinda Davis Lux is an M&A partner and leader of the corporate practice group for Wyche, P.A., a South Carolina law firm. Ms. Davis Lux focuses her practice on mergers and acquisitions, joint ventures, and financing transactions.

Key Takeaways:

  • It is a seller’s market in South Carolina for profitable middle-market companies seeking capital. The challenge for these companies is not becoming more attractive to investors, but becoming more visible to them.
  • Many out-of-state PE firms are active in South Carolina, and this is one of the biggest drivers of M&A activity.
  • In addition, South Carolina companies are buying businesses in other regions of the U.S. and bringing the acquired company’s headquarters to South Carolina, which is also driving economic activity.
  • Manufacturing remains a staple in South Carolina’s economy and this sector is active in the M&A market, as are the distribution, healthcare, advanced materials, aerospace and technology sectors.
  • As PE firms migrate downstream towards lower middle-market companies, there is increased competition for local investors who want to buy small companies.

Continue reading A Seller’s Market in South Carolina: An Interview with Melinda Davis Lux