M&A Update: What FV Likes
With the current US economy stagnant at best, the M&A scene on a macro level has been driven by strategic acquisitions and asset sales. FieldView expects the banking credit crunch to continue to weigh on business, leaving many companies to search for asset-based business lenders. Ultimately, the stagnant economy is forcing entrepreneurs to either growth their business or sell their business. Stale numbers for the small business has placed enormous pressure on ownership to search the balance sheet for profits; some vote internally to cut hours company-wide for a shorter work week and less pay. Business owners that have sustained or experienced growth from 2007-present are most willing to discuss making strategic acquisitions.
The President is right, we need job growth, the only plan: infrastructure. Government spending should boost industrials and aerospace & defense. Fieldview does not expect the US to decrease defense spending in any significant way. These sectors also offer attractive growth prospects in the private sector. Aerospace and Defense will see a decade of future growth fueled by global growth (BRIC), demand for new airframes, fuel efficiency, composite design, global defense spending. Industrial products tend to be steady growth and will see bump in government spending. Baby boomers are just now turning 65, expect to see wave of M&A activity as boomers decide to sell while the going is good. The recession has certainly woken the lifestyle entrepreneur and opened their eyes to the prospects of a wealthy retirement. It is time to diversify the nest egg which so often is tied directly to the entrepreneur's company.
Expect to see business owners respond favorably when presented with fully vetted buyers; reluctant when shown to the masses. Sellers want to see cash and security. FieldView is partnered with buyers looking to partner with management, sustain growth by providing strategic/financial support, and facilitate transition. This deal structure benefits the seller by providing cash outlay coupled with retirement security. Buyer is highly motivated to leverage seller expertise and grow the platform. Expect increase M&A Activity as economy continues to drive some sellers to the market, creating great advantages for well-placed strategic buyers.
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