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M&A Survey Featured in Merger Ink

Welcome to tbe Buyer's Market: Kuhn You Dig I.T.?
Zach Miller
June 27

Kuhn Capital has taken an interesting approach to the typical M&A survey. Looking not to measure past performance but gauge present perspectives, the investment bank recently released its inaugural Kuhn Capital Attitude Survey. This is what it tells us:

Sellers
According to the survey, 63% of companies said they are ďprobably, definitely, or possiblyĒ considering a sale within the next six months. Unfortunately, only 12% said that now is probably or definitely a good time to sell, versus a whopping 51% majority of respondents that said now is definitely or possibly not the time to be thinking about such things. But donít worry, it looks better down the road. In a reversal of percentages, 51% of those surveyed said they would probably or
definitely consider a sale within two years, versus just 13% who said they definitely or probably would not consider that.

Buyers
Now, this is odd. While nearly three-quarters of respondents said that now was probably or definitely a good time to buy, 62% said that they were definitely or probably not considering making a purchase within the next six months. Those odds donít seem to be much better in the long view, either, as half of the respondents said the same thing about their chances of making a buy within the next two years. That means everyoneís a seller?

Middle Grounds Valuations
... or at least professional price perceptions, are always important. Kuhnís respondents couldnít seem to be in agreement on this. When asked what multiples of sale would apply to the value of their company, the results were pretty much divided between .5X-1X (37%), 2x (37%) and 1.25X-1.5X (26%).

Speaking of terms, when it comes to either accepting or proposing a specific purchase offer, respondants said the most important factor was price, followed by cultural fit/ retaining people, percent of cash in the offer (thatís fascinating), buyerís financial consideration and lastly, personal timing condition.

To wrap up the odds and ends of the survey, Kuhn asked survey participants to discuss what characteristics they looked for in their M&A advisors. Industry specialization and the experience of principals top the list.

Generalists, beware.


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