Q2 Business Sales Took Longer, Saw Lower Values

The overall tenor of business sales (that is, of enterprises themselves) in the second quarter of 2016 reflected a slower pace and realized lower values than had been seen during the same period a year ago, according to a report by the International Business Brokers Association, M&A Source and Pepperdine Private Capital Market Project that surveyed the thoughts and insights of 378 business brokers and M&A advisors.

The research shows that the latest 2016 data exhibited a boost in smaller deal sizes. In fact, more than half of the market deals that closed in the quarter, at 57 percent, came it at under $499,999, while only 50 percent of deals were below that threshold last year. The upper echelons: Only 23 percent of transactions were above $5 million to as much as $50 million this past quarter, paling in comparison to the 34 percent a year ago.

Drilling down into the quarterly details, the report found “increased interest” from first-time buyers who were located outside the United States, women or former corporate executives, with a third of respondents claiming interest from foreigners and corporate execs. Some 12 percent said they had seen that female executives were “in the market to buy a business.”

Why sell? Retirement, for one top reason. Other issues spurring sales stem from family issues, the desire for new opportunities and even health reasons. As for transaction times, the report noted that, just several years ago, transactions were taking roughly two months to close, and deals now take roughly double that timeframe.