The Smith Report - Operational Playbooks

M&A Tables 2012

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The new M&A tables are out for 2012 from ACG courtesy of Thomson Reuters. These tables trap all deals done in the US over $10m. I’ve poured over the detail and extracted some conclusions:

Conclusions
  1. In 2012 the draft number above implies 6039 deals were completed involving US sellers. Approximately down 4% on 2011′s total of 6279.
  2. Average deal value in 2012 from these sellers was $130m.
  3. The highest average deal value came from the Financial Sector at $2.4Bn from 4 deals.
  4. The lowest average deal value came from the sector Personal Services at $1m from 25 deals. These were less than $10m on average because some would have involved minority stakes.
  5. On average overseas acquirers paid $165m covering 945 deals compared with an average of $123m per deal for US acquirers from 5094 deals.
  6. A summary of the top sectors by deal value is as follows:

Overall the scary part for the owner of an SMB is how rare the exiting for $10m or more is. Given the 5.9m firms who run a payroll in the US, the statistic to ponder is that only 1 in 1000 of you will sell out for $10m or more in any year given these tables.

 

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About the Author

Ian founded The Portfolio Partnership (TPP) in 2010. TPP is an operational consultancy focused on scaling private businesses safely. He believes his resume of building 4 previous businesses from publishing, investment banking to software in Europe and the States gives him a unique set of skills and a sense of humor. He remains a competitive masters track & field athlete and in 2012 was ranked #2 indoors in the world for his age at 400m.

Discussion

  1. Paul Cronin  February 8, 2013

    Very enlightening. M&A and business owners need to be paying attention. If the odds truly are 1/10th of 1 percent of $10million businesses sell in a given year, owners need to focus on improving their odds. Making the business stronger, saving money outside of the business, getting a personal plan for what they want to accomplish, and finding the right advisors to guide them, are all critical.

    (reply)
    • Ian Smith  February 8, 2013

      So true Paul. Owners of private businesses are often brave, skillful entrepreneurs but to truly scale a business to give yourself the option of selling out one day often needs help. In today’s market I believe there are more skillful advisors than ever before but you need to really want to scale. If you don’t that’s ok but there are consequences.

      Best

      Ian

      (reply)

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