THE BABSON COLLEGE SURVEY

The Babson College Survey (http://www.babson.edu/executive-education/thought-leadership/premium/Pages/six-key-trends.aspx), directed by Babson College Professor Kevin J. Mulvaney, assesses and defines current trends that impact Buyers and Sellers of businesses.

Among the survey’s key findings:

• It is still a Seller’s market for quality companies; Seller’s must develop a knowledgeable game plan to evaluate options and potential deal partners.
• Underperforming companies are not viable deals and receive lowball offers and little interest from Financial Buyers.
• Due diligence by Buyers has increased deal-making timeframes to 7–10 months.
• The smaller the company, the higher the demands for Seller assistance (employment, consulting, earn outs, deferred payouts, etc.) from the Buyer.

Regarding financing for Buyers, the Babson survey projects an increase in the number of opportunities for every type of middle-market financing. The Survey found a strong rebound in SBA loans and the yields on mezzanine debt dropped to 12–14% from historical averages of 15-20%.

“It is a very good time for entrepreneur owners to begin planning for their capital event” commented Mulvaney. Whether buying or selling a business, the likelihood for success increases exponentially by having a qualified M&A professional on your Team!