There has been a flurry of Mergers & Acquisitions activity in the past 6 months, both in the U.S. and Internationally. Several transactions we are working on will be announced in early 2015.
- Mid-sized firms realize bigger is better and making small acquisitions of quality firms can bolster both top-line and bottom-line growth. They are financing the down payment from cash reserves accumulated over the past few years.
- Many smaller firms have become frustrated by struggling as independents and want a larger playing field. They are now putting their firms in the mix.
- Sellers have become more realistic about the value of their firm. Multiples of earnings applicable in pre-recession 2007 no longer apply. Multiples are down and prospective sellers are realizing this if they want to sell.
- Smaller firms are exploiting global reach. Even major firms like Edelman (acquiring Paris based Elan), Finn Partners (acquiring London based Johnson King) and MWW (acquiring London based Braben) are further indicative of a trend. There will be many more deals in Canada, U.K., France, Asia, India and other parts of the world where having a presence will only enhance the future value of the buyer firm.
With the permission of Davis & Gilbert attorney Michael Lasky, I am attaching a very relevant and timely column he has written for PR Week. The article focuses on effective succession planning and zeroes in on key points regarding the second tier of management, phantom stock, valuation and managing for profitability. All of these are areas that I believe are critical in your strategic planning for 2015.
Read article: Michael Lasky- You are only as good as your number two