Quarterly Market Pulse Report Also Finds Speed of Exit, Clean Break, and Leaving a Legacy Important to Sellers
Cordo0va, TN May 15, 2017 — Seventy percent (70 percent) of business owners who are selling their companies say that taking care of their employees is a top consideration when evaluating potential buyers. After financial compensation, making sure employees are protected is the No. 1 concern. Business owners also value exiting their business quickly and leaving a legacy when selling their company according to the Q1 2017 Market Pulse Report published by the International Business Brokers Association (IBBA), M&A Source, and the Pepperdine Private Capital Market Project. Results indicate that few sellers are interested in employment contracts and other deal structures that keep them active in the business after the sale.
“When it comes to selling a business, owners care about more than just money,” according to Ron Edmonds of The Principium Group, a member of IBBA and the M&A Source, “I’ve seen situations where a business owner agrees to less money in order to sell to a buyer whom they believe will protect employees’ jobs and maintain a positive workplace culture.”
Seventy-seven percent (77 percent) of respondents said that deal structure is an important negotiation factor in most transactions. That is followed by negotiations over closing date, and an employment contract or non-compete contract for the seller.
“Both buyers and sellers are increasingly recognizing the high value of human capital,” said Craig Everett, PhD, director of the Pepperdine Private Capital Markets Project. “Negotiating the deal structure often includes protections for employees, such as keeping the company in its current location or agreeing not to reduce the workforce.”
About the Market Pulse Report
The Market Pulse Report compares conditions for businesses being sold on Main Street (values of $0-$2 million) to those being sold in the Lower Middle Market (values of $2 -$50 million). The Q1 2017 survey was completed April 1-17, by 315 business brokers and M&A advisors representing 37 states.
About International Business Brokers Association (IBBA) and the M&A Source
Founded in 1983, IBBA is the largest non-profit association specifically formed to meet the needs of people and firms engaged in various aspects of business brokerage and mergers and acquisitions. The IBBA is a trade association of business brokers providing education, conferences, professional designations, and networking opportunities. For more information about IBBA, visit the website at www.ibba.org or follow the IBBA on Facebook, Twitter, and LinkedIn.
Founded in 1991, The M&A Source promotes professional development of merger and acquisition professionals so that they may better serve their clients’ needs, and maximize public awareness of professional intermediary services available for middle market merger and acquisition transactions. For more information about the M&A Source visit www.masource.org, or follow The M&A Source on Facebook, LinkedIn, and Twitter.
About the Pepperdine Graziadio School of Business and Management
A leader in cultivating entrepreneurship and digital innovation, the Pepperdine Graziadio
School of Business and Management focuses on the real-world application of MBA-level business concepts. The Graziadio School provides student-focused, globally-oriented education through part-time, full-time, and executive MBA programs at our five Southern California locations, Silicon Valley and Santa Barbara campuses, as well as through online and hybrid formats. In addition, the Graziadio School offers a variety of master of science programs, a bachelor of science in management degree-completion program, and the Presidents and Key Executives MBA, as well as executive education certificate programs. Follow the Graziadio School on Facebook, on Twitter at @GraziadioSchool, Instagram and LinkedIn.
Ron Edmonds Scott M. Bushkie, CBI, M&AMI
Principium Group IBBA Marketing Chair
Member IBBA / M&A Source Principal, Cornerstone Business Services, Inc.
901-888-7741 (920) 436-9890
[email protected] www.cornerstone-business.com