Knowledge is power. The more you know, the better decisions you can make. At SDR Ventures, we’re always looking for ways to share our knowledge with the business community. In that spirit, here’s an insider view from the recent Rocky Mountain Corporate Growth Conference hosted by ACG Denver.
Here are our top 5 observations:
- Good deals remain very competitive, so many private-equity groups are being forced to stretch their mandates in order to compete. Numerous firms are vying for deals above or below their stated size limits and offering valuation multiples much higher than they ordinarily would.
- Big firms are competing with much smaller firms for the same deals, and all groups are paying premium prices for attractive companies. This is good news for sellers.
- The number of deals available in the market is not the biggest problem, but rather that there is a lack of “quality” deals available. Consequently, the quality deals that hit the market are extra competitive.
- Private equity groups are very aware of their competitive position as it relates to other capital groups. As a result, they appear to be articulating more and more creative value propositions as a capital partner both in terms of investment criteria and the value they would bring to acquisition opportunities.
- Debt providers are encountering very little deal flow outside of leveraged transactions due to high valuations that equity providers are paying. More and more companies are motivated to sell equity rather than bring on debt. In fact, we heard more than one story from debt providers who got pretty far along in the process with a prospect only to have that prospect suddenly back out and decide to sell. The valuation they received on the sell side was simply too high to pass up.
There’s the scoop. Now go put that knowledge to work for you!
SDR specializes in helping business owners maximize their value. We’ll navigate the complex transaction process, leaving no dollars on the table, while owners capitalize on their years of hard work. To learn more, visit our services page.