Is now really the time to plan your business transition?
With the largest generation in history reaching retirement age, private-business owners are proactively exploring their options for retirement and succession planning. The pandemic created economic uncertainty and a temporary market freeze that forced owners to reconsider the timing of their plans — and reminded everyone to thoughtfully reassess priorities, short- and long-term goals, and the ideal timing for a business transition.
Sector trends — whether your industry was among the hardest hit or grew unexpectedly from the disruption, you are left asking whether now is the time. Given the recovery in the M&A markets over recent quarters, the answer is an emphatic yes.
Valuations and interest rates — the opportunity is to take advantage of high valuations and historically low interest rates. The M&A marketplace has stormed back to life, with quality Canadian companies attracting serial entrepreneurs, foreign investors, strategic buyers and private equity firms flush with capital.
Dry powder — abundant equity capital combined with low interest rates has created more interested buyers than sellers, a supply-demand imbalance that favours sellers in all industries not decimated by the pandemic. Private-company valuations have rebounded to at or above pre-pandemic levels, with many buyers willing to look past temporary, COVID-related declines in profit.
Wealth preservation — owners focused on multi-generational wealth should keep their momentum and investigate the process now, before potential tax increases and other changes take effect.
Explore your options — an experienced advisor offers industry-specific insight and helps you decide whether to move forward or stay put, using strong M&A dynamics to garner attractive valuations and deal structures, particularly in resilient sectors like manufacturing and business services.
Key facts: is now the time to plan your transition?
Boomer retirements and the M&A recovery make it an opportune time to plan a transition
High valuations and historically low interest rates currently favour sellers
Dry powder creates more buyers than sellers; valuations are at or above pre-pandemic levels
Act before potential tax increases; an experienced advisor tailors timing to your industry
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.
