A Quiet Wave Is Coming for Privately Held Businesses
If you own a business worth $30 million to $150 million, something important is happening in the market right now. Two powerful forces are converging, and together they are reshaping the landscape for privately held companies.
First, an extraordinary amount of capital is looking for companies to buy. Private equity firms today are sitting on an estimated $3–$4 trillion of capital that must be invested (or they literally go out of business). That money has a single purpose: to acquire companies and grow them. But private equity is only part of the demand. Strategic buyers—larger companies looking to expand their capabilities, geographic reach, or product offerings—are also aggressively pursuing acquisitions. Why? Because organic growth in many industries is simply too slow. Buying companies is often the fastest path to growth. As a result, thousands of sophisticated buyers are actively searching for high-quality companies. Companies worth between $30 million and $150 million often represent attractive acquisition opportunities because they have, proven products or service, loyal customer bases, attractive margins, and significant room for expansion
Second, the “Baby Boomer Exodus.” At the same time, the generation that built a vast number of America’s privately held businesses is approaching retirement. Many baby boomer founders have spent 30 or 40 years building successful companies. For many owners, the company represents the majority of their net worth. But today many of those owners face a common challenge. Often, their children are not interested in running the business, there is no internal successor prepared to take over, or the business has become too complex to manage indefinitely.
Eventually this question becomes unavoidable: “How do I convert this lifetime of work into financial security?” For many founders, selling the company becomes the most practical solution.
Today, there is strong demand for high-quality businesses. But markets evolve. Interest rates change. Capital flows change. Buyer priorities change. And eventually, more business owners will decide to sell. When supply increases, competition among sellers increases as well. That can depress valuations.
The owners who achieve the best outcomes prepare early. The strongest exits rarely happen by accident. The owners who achieve exceptional outcomes typically begin preparing years before they sell. They focus on building businesses that buyers value highly. That usually includes developing a strong management team, reducing customer concentration, strengthening financial reporting, and creating clear opportunities for future growth. Preparation has a direct impact on valuation.
GROW and SELL Advisors specializes in preparing companies and their owners for this all-important, lifetime event. Give us a call to talk about your options. We never push owners to sell; that is a decision you must make on your own. But we can help inform your decision. And, if you are inclined to sell, we help position you and your company for the most successful outcome possible.
GROW and SELL Advisors, wholly-owned by Traversi & Co., LLC, is a premier sell-side M&A advisory firm – a boutique investment bank – serving the lower middle market. Visit us here.