2013 M&A Market Outlook – What It Means For You

Thomson Reuters has recently released its annual investment banking industry projections for 2013, and the current outlook is not as positive as the years past for most industry sectors.

The Bad

Due to recent and ongoing economic and political problems, such as the American Fiscal Cliff and many EU nations’ debt woes, the outlook for corporate growth is down, along with hiring and investment. Naturally, this will lead to decreased revenue and profit numbers for many companies in developed nations. As such, most investment banking divisions are expected to see a decrease in deal flow this year as compared to 2012.

The Good

In spite of this gloomy outlook, M&A activity is expected to increase throughout 2013. Corporations are still interested in expanding; however, their focus has shifted from geographical expansion to regional consolidation.

What It Means For You

For sellers, this means that there is still a strong market for business acquisitions as many large corporations are looking to expand locally by acquiring companies that have demonstrated their value by weathering the economic downturn of 2008. Furthermore, the amount of quality SME investment opportunities has shrunken due to a number of them going bankrupt in recent years, which has placed a premium on well-performing ones.

For buyers, the companies that have maintained solid financial standing over the past several years are likely to continue to grow as the economy gains steam, providing excellent investment opportunities. Additionally, there are many opportunities to invest in quality companies that have become cash-strapped due to the debt market liquidity drying up, meaning high returns in distressed company investments can be attained.

How Beacon Brokerage Can Help

As the premier Business Brokerage and M&A firm for SMEs in the Greater Toronto Area, as well as the rest of Ontario, we specialize in facilitating transactions such that business owners receive the best price for their business, and buyers can find the ideal investment opportunities to suit their needs.

Whether you are located in Toronto, Hamilton, Oakville, Mississauga, Brampton, Scarborough, Vaughan, or any other GTA location, Beacon Brokerage is the first call that entrepreneurs make when having made the decision to sell their business. With our sophisticated business brokerage, M&A advisory, and valuation services, we offer the entire array of services to retiring entrepreneurs as well as business buyers. If you are considering selling, or are interested in one of our current businesses for sale, please don’t hesitate to get in touch with one of the brokers for a complimentary discussion about how we can help.