Ron Davis
Ron knows a few things about the current M&A business
May 7, 2020
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face it, no one really knows what’s going to happen when life gets back to “normal.” In fact, we really don’t know what the new normal is going to look like. And what’s really scary is that it appears that many of our leaders in Washington don’t know either. However, since I’m writing this column for a newsletter that helps find buyers for companies for sale in the security space, I can tell you that what I do know about the market for buying and selling companies in the security industries is pretty significant.
For example, I do know that alarm companies and security integrators are selling, right now, at traditional multiples. I do know that deals are getting done. I do know that both buyers and sellers are coming up with “work arounds” to help them get deals done. I do know that there is money available to do these deals. I do know that even though some buyers are telling potential sellers that, “multiples are low right now, who knows if that’s going to change?” and that is not necessarily true. I do know that even though my good friend Ken Kirshenbaum thinks multiples are trading in the 35X range (5/5 column in his newsletter), I do know that we have rarely, if ever, obtained a multiple as low as 35X. And, I do know that there are buyers out there that are willing to pay a fair price for quality companies.
I really don’t know how things will be when this pandemic is finally in our rearview mirrors. I do know that the best thing we can do to make sure that happens sooner rather than later is, first, we need to listen to medical advisors (yes, the same ones that are telling our leaders in Washington what to do next), and second, as hard as it may seem, we need to keep moving forward in our businesses. If you’re a buyer of businesses in the security space, let us know. If you’re a seller in the security space, let us help you, I know that now is a good time for you to explore those options.
It seems to me that if you really want to help the country move forward, commercially, do what you do best. If you were thinking of selling at about this time, give us a call. If you were thinking of selling because of what’s going on, you might want to think about it for a while. In spite of what some prognosticators are telling us, we all really know what to do. Let’s do it.
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