The market is fluid and is moving constantly, never more so than now. The big end of town appears busy with deals galore, to quote James Thomson in the AFR on August 26th “M&A is back in a big way.”
We established in lesson #2 that if a business is approached by a potential buyer (Gorilla) that the interest must be qualified and handled efficiently leading to an early indicative offer in writing, based upon the provision of adequate but limited information. We also determined that such a buyer, having knocked on your door is likely to have knocked on quite a few other doors, and is probably running a broader process.
We established in my last blog that selling your business is likely to involve a major mismatch in terms of the scale and size of the likely buyer and that getting in the ring with them by yourself and without a clear strategy might not work out so well.
The shareholders of established private companies in Australia, many of whom will be seeking an exit in the next ten years, ought to be aware of certain realities around deal doing and the market, I am going to unpack some of these over the next series of posts, which I hope people might find helpful.
According to the recent Dealmakers report the global trend in M&A is down, by number of deals -15% and by value -18%. This is driven by the “fears of recession, rising interest rates and geopolitical uncertainties.”
There’s always something!
I’m sure everyone has felt it – that gentle squeeze on our purses and wallets. Whether it is at the supermarket or the petrol pump, the café or the corner store, inflation seems to be hitting our hip-pocket nerve once more.
Sometimes the best business stories start with a simple "why not?"
That's exactly what happened when Luke Petherbridge, a Sydney-raised finance guy, got asked if he'd consider moving to Cleveland, Ohio. Fast-forward a few years, and he's now running Link Logistics - one of America's largest logistics operations with 1,100 staff, 3,500 buildings, and a staggering statistic: roughly 5% of US GDP flows through their facilities.
Australia is getting older! Next year 22% of Australians will be aged 65 or older. This is up from 16% in 2020, this was double the 8% in 1970s. The reasons for the spike are the spike in the birth rate after the war (the baby boomers), as well as falling birth rates, however, on a positive note Australians are living 30 years longer than they were a century ago!
Businesses in the Australian mid-market, of which there are 300,000 have a combined annual revenue of 41.trillion dollars making average of 10.4% net profit before tax. However, 20% of all operating businesses in Australia don’t make any profit! In this blog we address the very real question facing those owners who are not making any profit, is my business worth anything?