Transworld M&A Advisors is a company that specializes in middle market mergers and acquisitions. This niche encompasses businesses with revenue between $5 million and $100 million, so we work within a clearly defined market. When we consult with clients, we hear many of the same questions on a consistent basis. With this in mind, we will share three of these questions here and provide brief answers.
What are the benefits of the middle market for private equity firms and strategic acquisition specialists?
This is a good question, and the answer has a couple of different facets to it. One of the major advantages that people have been recognizing over recent years is the fact that there is a lot of opportunity within this segment. There are approximately 25,000 companies out there that generate between $100 million and $500 million in revenue. Clearly, that is a very limited pool.
Things are very different in the lower middle market. There are somewhere in the vicinity of 350,000 businesses within our target segment. As a result, the sheer volume of opportunities is very appealing to savvy investors.
There is another factor that is very compelling, and it is coupled with an interesting demographic phenomenon. At the present time, the baby boomer generation is reaching retirement age. Many baby boomers that control companies never thought about succession planning, and their children do not want to carry the torch. As a result, there are many motivated sellers in the market.
How you place a value on a business?
This is a major area of strength for our company. First, we have a vast network of partners that have a wealth of experience across all different industries, and this is invaluable. We use a combination of industry-standard methodologies, and it starts with the market approach.
The market approach involves identifying the sale price of companies that are comparable to the one that we are marketing for a client. Another approach that we weigh heavily is the income approach. We estimate the income stream that will be generated by the business going forward, and this is a huge part of the equation.
Why should I choose Transworld M & A Advisors?
The answer can be reduced to two words: track record. Simply take a look at our “done deals” page and this will answer your question very efficiently.
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