M&A market projected to remain strong

Posted on Oct 9, 2019 :: Insight on Business, Web Exclusive
Jessica Thiel
Posted by of Insight Publications

Whether buying or selling a business, storytelling is key. That was a major takeaway at Wednesday’s Mergers and Acquisitions Forum.

Insight Publications presented the event at Lambeau Field in partnership with the Taureau Group, Nicolet National Bank, Godfrey & Kahn S.C. and the Wisconsin Manufacturing Extension Partnership.

The event kicked off with a keynote presentation from Jack Bennett, former University of Wisconsin-Stevens Point men’s basketball coach who led the team to consecutive Division III national championships in 2004 and 2005. He is the brother of former UW basketball coach Dick Bennett and uncle to University of Virginia basketball coach Tony Bennett.

Bennett shared experiences he’d gathered as a coach. He taught his players to live by the acronym GIYBALWI, or Give It Your Best And Live With It.

How people handle failings and adversity in both their personal and business lives matters, he told attendees. “The most important thing you have to do in business, in life, in the coaching world is stay humble in victory and have some pride, have some confidence … in defeat,” Bennett said.

Ann Hanna, managing director and owner of the Taureau Group, led a panel discussion that included Dave Strand, former owner and CEO of Wisconsin Oven Corp.; Corey Vanderpoel, managing director and owner of the Taureau Group; Joe Polaneczky, principal of Merit Capital Partners; and Mike Malatesta, leader of ERC Midwest, LLC. The group discussed the elements of successful mergers and acquisitions and looked into what the future may bring.

Polaneczky said it remains a seller’s market, but at the same time, “we’re later in the cycle” and he’s starting to see caution creep in. Some anticipate a natural pullback will come in the next two or three years, he said.

High-quality, less cyclical assets remain sought after and attract more capital. Conversely, more cyclical or project-based companies may face more challenges and need to ensure they articulate their vision clearly, Polaneczky said.

As for uncertainty around the 2020 presidential election, Strand said he didn’t expect it to have an outsize impact. “We’ve worked through many presidential elections, and we don’t see it killing the deal,” he said.

Vanderpoel said in determining the right time to sell, the market is in a strong cycle, and it’s a good time for sellers to proceed. He added that it typically takes about nine to 12 months to sell a business, and it’s hard to predict how the economy might change.

In preparing to sell, Malatesta said it’s important for businesses to make sure their books are tight well before wanting to sell. In addition, the buyer needs to feel confident it can run without the owner’s involvement moving forward, he said.

The panelists agreed planning is key. “Preparation is so important in getting the best price,” Malatesta said. “Every company comes in with the desire to be the best, and that desire doesn’t manifest itself unless particular or specific actions are taken.”