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M&A ACTIVITY ON THE RISE

on Friday, 18 July 2014 20:48

Ed Towers of Tiger Brokerage Group announces that Mergermarket has reported that merger and acquisition (M&A) has been rising this year.  The first half of 2014 was the most active January through June period in the U.S. M&A activity since 2007.  U.S. M&A enterprise value rose to $694.6 billion in the first half of 2014.  This is a 98.3% increase over 2013.  The top industry for M&A transactions are pharma, medical and biotech at $157.0 billion.  The 2nd largest industry was telecom at $152.5 billion in deals.  There are no signs that the pace of M&A activity will slow for the remainder of 2014.  Tiger Brokerage Group is a middle market M&A advisory firm in Naples, FL.

Study Shows That More Businesses Will Be Sold In 2014

on Monday, 30 December 2013 03:59

The merger and acquisition market is improving. Ed Towers of Tiger Brokerage Group, reports that the third quarter of 2013 Market Pulse Quarterly Survey Report was just released. International Business Brokers Association and M&A Source prepare this research in conjunction with Pepperdine University.

“This finding is consistent with predictions that more business owners will look to sell their companies in the coming year.” In every market segment, the majority of advisors predict deal value will grow in the next three months.

“Buyers in the lower middle market continue to gain confidence in the economy and in their ability to grow a business. They believe that buying a business is the best way to put money to work, versus starting an operation from the ground-up or other opportunities.”

In every segment, retirement was named the number one reason that sellers put their business on the market. For Main Street buyers, the number one motivating factor was to buy a job and control their own destiny.

Valuation multiples are markedly stronger in the lower middle market, correlating to a strong seller’s market sentiment and the presence of private equity firms in the buyer pool, as well as existing companies poised for growth through acquisition. The multiple for transactions between two million and five million is now 4.3 times EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. The multiple for transactions between five million and fifty million is 5.8 times EBITDA.

Ed Towers points out that personal services, restaurants, business services, and consumer goods/retail ranked among the most active industries. Health care and construction/engineering are also hot industries.

Tiger Brokerage Group is an M&A advisory firm located in Naples. They find buyers for owners of privately held businesses in the mid market.

39 Reasons Why You Should Use Tiger

on Monday, 07 October 2013 15:46

39 Reasons Why You Should Use Tiger

1.  Has 28 years of combined experience in mergers and acquisitions

    - not just a business broker selling “main street” type of businesses.

    - interests and background beyond that of a real estate agent.

2.  Not your typical business broker that represents transactions, Tiger represents only you.

3.  Utilizes nationwide/global search, not just local.

4.  Emphasizes methods to maintain confidentiality to keep the sale process quiet.

Steps to selling a company

on Thursday, 19 September 2013 17:01

1. Tiger receives response card/referral/call/email inquiring about selling co.

2. Tiger talks with respondent after checking D&B and website.

3. Owner receives signed Confidentiality Agreement by Tiger to protect owner.

4. Owner answers preliminary questions.

5. Tiger sends forms on owner add backs and financials requested to be able to do the valuation.

Private Deal Update: Multiples Rising in Midmarket

on Saturday, 24 August 2013 17:40

Private Deal Update: Multiples Rising in Midmarket

For Immediate Release August 22, 2013

Naples, FL - Merger and acquisition values and activity are heating up.

That is the analysis from the recently released report on business transactions.

The third quarter Private Deal Update by Pratt’s Stats show that transactions of companies in the $1-5M range are now selling for 4.38 times their cash flow (EBIT) versus a 3.78 multiple last year. These companies also are selling for 48% of net sales versus 38% last year. Pratt’s Stats database of private company acquisitions provides general trend information on valuation multiples and profit margins for transactions in the M&A (mergers and acquisitions) database. M&A advisors can use the information to conduct comparative analysis to help determine the value for owners trying to sell their companies.

Ed Towers, President of Tiger Brokerage Group, says “The manufacturing sector has the highest multiple of cash flow 2013 to date. The wholesale trade sector has risen the most this year. The multiple that wholesalers are selling for now is 4.40 while it was only 3.48 a year ago.” Tiger Brokerage Group is an M&A advisory firm headquartered in Naples.

“Clearly M&A action is heating up”, Towers reports. There are 13,769 transactions in Pratt’s Stats database of privately held companies. In recent years, companies with sales over $5M tended to have the largest multiples.

What you should look for in a Merger & Acquisition Intermediary

on Tuesday, 30 July 2013 14:24

WHAT YOU SHOULD LOOK FOR IN A MERGER & ACQUISITION INTERMEDIARY - Check to see if the candidate: • Has many years of experience as M&A Intermediary. - Not just a main street business broker. - Interests and background beyond that of a real estate broker. • Has credential of Certified Business Broker (CBI) • Has history of success selling mid-sized companies. • Works nationwide, not just locally. • Emphasizes methods to maintain confidentiality. • Prepares written valuation (including comparables in SIC industry). • Recasts financials to increase the value. • Prepares a written Marketing Plan with a timetable. • Prepares professional and comprehensive Descriptive Offering Report (“book”). - Describing historical results but selling the future opportunity. • Understands the value of goodwill. • Optimizes the value and terms in the transaction. • Has appreciation of the tax ramifications to parties and has relationships with experts. • Utilizes multiple modes for marketing your company. • Has a proprietary database of a large number of potential buyers (including PEGs, VCs, and registered buyers). • Can evaluate the pros and cons of various alternatives. • Belongs to M&A Source, the world’s largest association of intermediaries. • Possesses strong negotiating skills. • Enjoys being a middleman (buffer) between parties. • May allow the seller to be the “back stop” in the negotiations. • Can coordinate the sell-side activities with associated specialists and advisors: - CPA/accountant - Tax attorney - Estate attorney - M&A transaction attorney - Escrow officer - Insurance carrier/agent - Real estate landlord - Lender/banker - Financial planner • More interested in closing a transaction than advising. • Has broad background including sales experience. • Has actually bought & sold their own company. • Is a team player. • Relates to owner’s unique situation, including emotional issues. • Is preferably a M&A Master Intermediary (M&A MI).

M&A Activity Increases

on Monday, 17 June 2013 15:30

Ed Towers of Tiger Brokerage Group in Naples reports a key finding from a recently released survey is that “Brokers and Mergers and Acquisition Advisors are feeling decidedly optimistic about market activity in 2013”. The study is from the fourth quarter 2012 by the International Business Brokers Association. The survey also announced “For the first time, baby boomer’s retirement was the number one reason driving business sales across all Main Street and lower middle market sectors.”  Towers states that the average business transaction multiple is 2.5 to 3.5 times sellers discretionary income. Tiger Brokerage Group (www.tigerbrokerage.com) is an M&A Advisory and Business Brokerage firm. They find buyers for owners of privately held companies in Florida. Towers is one of 80 Master Intermediaries in the world.

Babson Finds M&A Has Improved

on Tuesday, 04 June 2013 21:23

Babson Finds M&A Has Improved

“It is a very good time for entrepreneur owners to begin planning for their capital event.”

That is the theme of the Babson College Middle Market/Small Business Mergers & Acquisition Survey conducted by the business school’s MBA students in the first quarter of 2013.  The report was released May 15th, according to Ed Towers, a Master Intermediary with an M&A advisory firm in Naples.  The President of Tiger Brokerage Group, Mr. Towers quotes that the research shows that “Mergers and Acquisitions has significantly improved in the past two years”.   

TALKING WITH OWNERS: MISCONCEPTIONS ABOUT SELLING YOUR COMPANY

on Monday, 23 April 2012 07:17

Many business owners have misconceptions about selling their company. I have learned these twelve common misconceptions from my 26 years of M&A (mergers and acquisitions) experience as: 1) Vice President of M&A for two large publicly held companies, 2) Managing Director of a nationwide M&A advisory firm and 3) now as President of TIGER Brokerage Group. Commonly the sale of the company is the biggest financial decision an owner makes. Consequently, a mistake made in selling the company can be very expensive but can be avoided.

IMPORTANCE OF OWNERS HAVING A TRANSFER PLAN

on Monday, 23 April 2012 07:17

Published: CSA Journal 29, December 2005

IMPORTANCE OF OWNERS HAVING A TRANSFER PLAN

By Edward W. Towers, CSA and CBI

CSA’s commonly counsel seniors on health, tax, financial planning, estate planning, investments, and insurance matters. One frequently ignored area is transfer planning (A.K.A. exit planning) for seniors who own companies. An exit plan considers the various alternatives for an owner to transfer ownership and puts in writing the desired plan (with a timetable) on how to turn over the company to the new owner. It is like an estate plan but it is for the company. By recommending the development of an exit plan for clients in need of one, a CSA can be of great service. The opportunity to be of help in this area is more beneficial, possibly more important than having a will. This situation occurs more frequently than most CSA’s realize.

Citizens over 55 years of age own thirty-one percent of businesses in the U.S. We estimate that only fifteen percent of company owners have exit plans. In portfolio management, personal financial planners advise paying attention to diversification across the various classes (e.g. stocks, bonds, cash, etc.). A study by Vanguard has shown that asset allocation is the most important factor in investing (more than the actual selection of individual stocks!). Although diversification receives the majority of the publicity, a business owner’s largest investment, his company, surprisingly is often ignored. Commonly, three quarters of an owner’s net worth are tied up in his company. Having so much equity tied up in one investment is very risky – especially for senior citizens. Furthermore, it is worse that most business owners don’t have any plan for transferring or exiting.

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