How to Prosper From the Great Recession of
The Great Recession of 2009 – 2010 has produced the most difficult business climate for business owners since the Great Depression of the 1930’s. The near collapse of the worldwide financial system was certainly enough to get all our attention. As we slowly continue to recover from these events, what will the outlook for mergers and acquisitions be for middle market American companies? We believe that there is currently great opportunity in this environment.
OpportunitiesWhether your company has performed well or not over this difficult period, the current environment can provide you with an opportunity to enhance your personal needs. Buyers are looking not only for larger flagship businesses to build upon but, they are also looking for firms that they can add to their existing holdings. A large percentage of deals every year falls into this add-on category.
As you emerge from the recession, your needs may have changed ... “timing is everything.” You will definitely see a wave of business acquisitions as the economy continues to recover over the next few years.Deals can be flexibly structured to satisfy sellers of both types of firms. As you emerge from the recession, your needs may have changed and you may need to think strongly about selling your firm.
We have built a database of strategic and financial buyers covering many different industries. Our corporate tenure has allowed us to diligently build up relationships with these prospective buyers and we are recognized as excellent deal makers as well as good custodians of our clients’ interests. You have heard the saying that “timing is everything.” You will definitely see a wave of business acquisitions as the economy continues to recover over the next few years. The wise business owner will respect and profit from this increased activity.
Money on the SidelinesNaturally, acquirers were reluctant to make purchases during the worst times of the recession. Similar to you and your firm, many acquirers were faced with similar problems that they could not ignore.
During this period of M&A inactivity, a great deal of capital has been built up on the sidelines waiting to be invested.This led to a period of increased focus on their existing holdings and less focus on expansion. During this period of M&A inactivity, a great deal of capital has been built up on the sidelines waiting to be invested. Private equity groups who represent private investors’ funds are anxious to satisfy their clients’ needs for returns. They are in business for one reason and that is to purchase companies and grow them for their investors.
Many of these groups already own a large portfolio of companies in various industries and service sectors that they are aggressively looking to add to through acquisitions. Strategic buyers are now also becoming much more active now that current business indicators are pointed upwards. They realize that there are significant opportunities in the market and they are acting to take advantage of them.
Financial InstitutionsAlthough the banking industry has gone through major trauma during this time frame, they are now looking to put their clients’ money to work. There can be no question that there will be new governmental regulations placed on all banking institutions in the country in an attempt to prevent another potential meltdown. As this regulation process proceeds and capital requirements become increasingly clearer for banking executives, the pace of loaning funds will be greatly accelerated. We have noticed that although loan approvals have taken somewhat longer, they definitely have steadily increased. Buyers may be required to bring more equity into deals which will be a benefit for sellers due to less leverage being placed on deals.
American SpiritWe are great believers in it. There is nothing else like it in the world! The Great Depression only slowed Americans down but didn’t stop them. In fact, it brought on the greatest period of sustained economic growth that the country has ever seen.
The Great Depression ... brought on the greatest period of sustained economic growth that the country has ever seen.Likewise, we believe, along with many economic experts, that there will be a similar prolonged period of growth emerging from the recent recession. American spirit and ingenuity will help to propel the economy to heights that we’ve not seen before. Mergers and acquisition activity will be brisk as the business cycle continues to correct itself. Bringing buyers and sellers together as America recovers is our goal at Aspen Mergers & Acquisitions. Please call us for a free and confidential discussion as to how you could benefit during this incredible period of economic resurgence. After all, “TIMING IS EVERYTHING.”
Robert A. Veri