Family Business Director

Corporate Finance & Planning Insights for Multi-Generational Family Businesses

Category

M&A


Planning & Strategy Special Topics

Considerations in Merger Transactions

This week we welcome Nick Heinz, ASA to the Family Business Director Blog. Nick is a Senior Vice President at Mercer Capital and a member of the firm’s Transaction Advisory team. This article originally appeared as part of an ongoing series, Buy-Side Considerations, from Mercer Capital’s Transaction Advisory team and highlights key considerations for family businesses looking to engage in a merger.

Transaction Outlook 2022

Dealmakers logged record levels of merger and acquisition activity in the middle market (deal values between $10 million and $500 million) in 2021. In this post, we highlight a few of the trends that bore themselves out in middle market M&A activity in 2021 that family business owners and directors should keep in mind when evaluating potential transactions in 2022.

Shareholder Engagement Special Topics

Family Business Purpose and Transactions

In this post, we offer a unique perspective from Atticus Frank, CFA who worked in his family’s business for nearly three years prior to returning to Mercer Capital and joining the team’s Family Business Advisory Group. This post focuses on the wisdom, or lack thereof, of transactions. M&A decisions shouldn’t be undertaken without understanding the meaning of the family business to the family (Is the family business a growth engine, a store of value, a wealth accumulation vehicle, or a lifestyle vehicle). Atticus tackles the topic with a story about his family business.

Middle Market M&A Amidst a Recovering Economy

For family business directors, 2021 should be an opportune time to consider making an acquisition. General indications on valuation suggest that the private company M&A market has not been priced-up at anywhere near what has been seen in the public markets. While this difference may be caused by a public market over-valuation issue that is “corrected” in the short-term, it suggests that there could be positive momentum in private company valuations as the economy continues to move through subsequent stages of the post-pandemic recovery.  A good M&A deal can be made even better with favorable financing, which should be available to many borrowers in the current environment. We can’t predict the future, but those who take a buyer’s view of the M&A market now might be rewarded with enhanced returns.  With pent up demand and a high availability of capital, we anticipate a rise in M&A activity over the next year with the best valuations and financing deals likely favoring the early bidders.

Evaluating Acquisition Offers To-Do List

In last week’s post, we explored how to respond to unsolicited acquisition offers.  This week’s to-do list is about being prepared for such offers if and when they come.

How Should We Respond to an Acquisition Offer?

Successful businesses don’t have to go looking for potential acquirers—potential acquirers are likely to come looking for them. Most of our family business clients have no intention of selling in the near-term, and yet they often receive a steady stream of unsolicited offers from eager suitors. Many of these offers can be quickly dismissed as uninformed or bottom-fishing, but serious inquiries from legitimate buyers of capacity occasionally appear that require a response.

Capital Budgeting Capital Structure Dividend Policy Performance Measurement Shareholder Engagement Taxes

What Keeps Family Business Directors Awake at Night?

Stewarding a multi-generation family business is a privilege that comes with certain responsibilities, and each family business faces a unique set of challenges at any given time.  For some, shareholder engagement is not currently an issue, but establishing a workable management accountability program is.  For others, dividend policy is easy, while next gen development weighs heavily. Through our family business advisory services practice, we work with successful families facing issues like these every day.

Consulting Services

Family Business Advisory Services

Mercer Capital provides financial education services and other strategic financial consulting to family businesses