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New M&A Buyers and Our Sellers Market – Part 2

by Basil Peters on April 20, 2012 · 8 comments

How Exits Have Changed in 2012 -
Presented at the National Angel Capital Association Summit -
March 8, 2012 in Austin, Texas -

Highlights of Part 2:

  • Boomer buyers – a new category of buyers for companies in the $20 million range
  • Family offices – not a term we heard much in North America until recently
  • A surprising new type of buyer – Venture Capital funds operating like P-E funds
  • International buyers – still small but increasing
  • There has never been this much cash looking for acquisitions – well over $10 trillion
  • How many acquisitions is $1 trillion?
  • The number of buyers for most companies is practically unlimited
  • These trends are all combining to create a fast moving, diverse, sellers market
  • Prices are up about 20% over the past year

This is the Powerpoint for “How Exits Have Changed in 2012“.

The video for part 3 of How Exits Have Changed is here.

{ 8 comments… read them below or add one }

Bob Veris May 6, 2012 at 8:12 am

Well done and spot on! Boomers are everywhere and deserving our attention.

Reply

Basil Peters May 7, 2012 at 6:55 am

Hi Bob – agreed. The boomer bulge has distorted every part of our society. Now they are heating up the M&A market.

Reply

Shawn G Kalin May 6, 2012 at 11:52 am

I tend to agree with the Boomer angel demographic.

Is there an enough of an appetite for risk with this group though?

Are they getting into IT and web co’s?

Time will tell.

Best,
Shawn G Kalin

Reply

Basil Peters May 7, 2012 at 6:56 am

Shawn – in my experience, the boomer buyers can be very aggressive. And, yes, I’ve seen individual boomers buy IT and web companies.

Reply

Ian Graham May 7, 2012 at 5:10 pm

I found the point you made about VC firms buying “horses” instead of “jockeys” fascinating. Do the firms then put their own management team in place? IMHO a company would need to be to a certain size and critical mass before the founders could be displaced without destroying the organizations culture.

The huge surplus of cash looking for deals is very concerning. This tends to add credibility to those clamoring about the impending bubble. Lots of money and limited deals could easily lead to irrational exuberance.

Reply

Basil Peters May 13, 2012 at 7:17 am

Ian – agreed – the VC firms doing “buyouts” is a fascinating new development. I suspect the VC firms will have to put new management in place in the medium term. Putting that much cash in any founders jeans tends to either reduce their work ethic or make them start to thing about their next startup.

Many of my friends in Silicon Valley are starting to say that in early-stage tech investing we are already at ‘irrational exuberance’.

Reply

James Blair May 24, 2012 at 2:21 am

We haven’t seen much irrational exuberance here in the UK maybe we are 18 months behind the USA .

Reply

Basil Peters September 20, 2012 at 6:06 am

James – the irrational exuberance is definitely still regional. With the exceptionally low cost of capital, I expect (hope?) it will continue to spread.

Reply

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