Has M&A deal activity increased in 2021? In our experience, the answer is a resounding yes. In the last few weeks alone, we have closed 9 M&A Deals which is a record for a 4 week period. And in less than 9 months of 2021, we have already exceeded our revenue for all of 2020, which was a record year for us. We continue to consistently grow each year by providing superior digital marketing and experienced advice to our clients.
Why has the Mid Market M&A sector been hot?
M&A deal activity for the industry as a whole is at a record $2 Trillion for 2021. We believe it’s due to a number of factors, including an economy that is heating up because of Vaccinations that have slowed down the Covid-19 Pandemic. Current conditions make it easier to grow through acquisition rather than trying to hire good people in a tight labor market. And with supply chain challenges, those companies that can supply in-demand products and services becoming attractive acquisition targets.
In addition, there is a lot of money that needs to be put to work (dry powder) from private equity firms. These M&A market forces in 2021 result in an expansion of valuation multiples and higher sale prices for business owners. This is in parallel to a hot housing marketing that has also seen prices rise.
It’s a Sellers Market for Business Sales in 2021
Business owners with growing profitable businesses are definitely in the driver’s seat when it comes time to sell their business in 2021 or 2022. You can expect multiple offers and high M&A activity.
Low interest rates and a favorable capital market also contribute to higher deal volumes with the easing of lending practices. Having said that, of course, pricing expectations need to be in line with what is realistic. Synergy Business Brokers can provide you with a business valuation to see if it is at a level that you want to move forward with.
The middle market is the center of mergers and acquisitions activity, especially in industries with promising long-term outlooks such as health care and technology. But other industries such as transportation, manufacturing, distribution, and construction are in favor as well.
What are some of the M&A Deals that we closed in the first 9 months of 2021?
If you are looking for a middle-market M&A firm with high deal activity in 2021, we will outline some of the deals we have closed. It should come as no surprise that healthcare was a hot sector for M&A activity. We started and completed a number of M&A Healthcare deals in 2021, including:
- A mental health facility in New Jersey with 30 therapists that provides support virtually as well as in-person counseling for substance abuse, depression, anxiety, ADD, and more. The acquirer was another well-financed health care facility that was growing through multiple acquisitions. The deal was closed in less than 5 months from start to finish.
- Home Healthcare services business in Texas was sold in less than 3 months. The business provides skilled nursing, physical therapy, speech therapy, diabetes management, and more. The buyer obtained SBA financing with only a 5% down payment.
- Nurse Practioner Business providing in-home primary care as well as telehealthcare. The business was sold to a health care executive entrepreneur.
- Healthcare Staffing & Adult Foster Care Home Business in Norfolk County, MA, was acquired by a $1.5 Billion diversified healthcare business owned by a private equity group. The business was sold for full price with an accepted offer in less than a month from the start of the business sale process.
Construction M&A was also a hot area in 2021. Some case studies of construction deals we closed in 2021 are the following:
- An HVAC company serving residential and commercial customers was acquired in less than 5 months from the start of our M&A assignment. The business was sold to a buyer that we had worked with on other HVAC deals. The buyer was prequalified for an SBA loan which allowed the seller to feel comfortable with moving forward with the deal.
- Construction Inspection and Building Materials Testing Business in New York. They test the structure and inspect both residential and commercial buildings to make sure they meet the state and federal requirements. The business was acquired by an Engineering Firm that wanted to provide these services to their clients as well as expand their new clients.
- Our 2nd HVAC business (Thermal Air, Inc.) was acquired in 2021 by a facilities services company (Tech Services, Inc. of NJ) that provides a full suite of services to their clients, including Electrical, plumbing, HVAC, Security, and Construction.
Manufacturing M&A always has some activity for us, and 2021 was no different. Here are a couple of manufacturing deals we closed in 2021.
- Steel Fabrication Business in Maryland. They manufacture steel products such as stairs, railings, connection parts, and more. Their facility has plenty of room with 48,000 sq. ft. The business was acquired by an entrepreneur that had bought a construction business from us last year. Based on the buyer’s previous experience, we were confident in his ability to close on the deal and operate it successfully going forward, and the seller agreed.
- Trailer Manufacturing Business with a 127,000 sq. ft. facility on a 42-acre property. They manufacture trailers for industrial, commercial, and recreational uses with over 40 models. They have a well-trained team of over 90 employees. They supply trailers for automobiles, landscaping equipment, horses, cargo, motorcycles, livestock, and more. The business was profitable but also came with some debt, so it took some time to find the right buyer that was willing to acquire the debt.
- Electronic Component Manufacturer in Connecticut. They supply specialized electronic components to the healthcare industry with a specialty in echocardiograms. The company has an ISO 9001 certified facility that they use to supply components to several major manufacturers that then assemble them with other parts to produce a finished product. We contacted companies in the industry that made offers but the top offer came from someone that we had a previous relationship with that was looking for this type of company.
Synergy Business Brokers closed a couple of deals in the distribution industry during the first 9 months of 2021 including:
- Industrial Automation Distribution Company that sold products from Allen Bradley, Siemens, Mistubishi, and more. We introduced the buyer to our banking contacts, and he was able to finance the business with only 9% down.
- Pet Supply Distributor that sold dog food, pet toys, and supplies via e-commerce and a warehouse for both wholesale and retail. We introduced a buyer that was able to purchase the company with bank financing.
Every year we close some tech M&A deals. This year we completed the sale of Information Systems Division, Inc. (ISD) to Cloud Equity Group, which is a private equity firm that has made half a dozen tech acquisitions and is interested in making additional purchases. ISD provides IT Management Services for data back up and recovery, cybersecurity, server management, tech support, and more.
We sold Cougar Express (Trucking Company) to a public company called Transportation & Logistics Systems, Inc. They were acquiring multiple transportation companies to grow through acquisition. Their aggressive growth plan allowed them to make the most attractive offer, which was 4X owner’s net cash flow.
We sold ASE Group, which is a company that provides security systems including Access Control, Video Surveillance, and Alarm Systems for residential, commercial, and industrial customers.
2021 included the sale of an expense reduction consulting company. The business provided its customers with cost savings on a contingency model through rebates, tax incentives, and energy efficiency.
Synergy Business Brokers sold a museum (KGB Espionage Museum) that was closed due to Covid. We located a buyer that auctioned off the museum’s items to wealthy investors such as Elon Musk and other celebrities.
Based on all of the M&A deals we’ve done in 2021 and our current growth rate, we anticipate being on the list of Inc. 5,000 companies representing the fastest growing businesses in the U.S. We have many 5 star reviews from our customers that were happy with the M&A services that we provided.
Contact Us for M&A Services in 2021