The M&A market has now had a few years of stability.
Companies continue to make money and the underlying macroeconomic trends
support higher levels of business confidence. Despite new healthcare
regulations and calls for higher taxation in Washington, most business
owners are heading into 2014 with a few good years under their belts and
increasing optimism. Many companies are ramping up business acquisition
opportunities in 2014 as a way to increase their growth. There are a
number of reasons why companies are doing this. Firstly, interest rates
continue to be at historically low levels and loans are widely
available. Strategic business acquisition can be easily financed at low
rates. Acquisitions continue to represent the best way to jump start
organic growth at most middle market companies. They provide valuable
assets such as customer portfolios and new product sets they can take
years to accumulate on their own. They also bring teams of quality
employees that have special skills not easily sourced in the labor
markets.
The best business acquisition opportunities in 2014 can
be found in old line businesses, such as distribution and service
companies who are not fully monetizing the value of their customer
accounts or product portfolios. For example, many companies have strong
customer relationships selling a single service or product but are
unable to expand their offerings to provide a fuller spectrum of product
offerings. These companies lack innovation capability and more than
likely lack visionary product design leadership in their organization.
Some companies have hard to assemble product lines and offerings but
lack the ability to bring these products into new channels such as
federal government channels, new territories and online marketplaces.
These companies often are steeped in product knowledge and customer
service but lack the channel development vision. When a company's
revenue levels off and an owner reaches a certain age, the probability
of future growth diminishes.
The best sectors for business
acquisition opportunity today are in the IT Consulting, Direct sales
distribution and Healthcare service sectors. All of these sectors have
experienced significant change over the past several years due. IT has
gone from a localized consulting model to a cloud based offshore model.
With the cloud becoming omnipresent, IT delivery channels have been
structurally upended. Distribution companies that have historically used
direct sales to drive growth are now dealing with adoption of new
technologically based sales and marketing tools. Customer's today want
to deal with fewer suppliers and are organizing managed purchasing
platforms that may cut out certain suppliers. Most direct sales based
distributors need to adopt new technologies such as skype, video
conferencing and hand held tablets into their sales process to keep
their sales force on the cutting edge. Health care companies
particularly in the service side are under attack from technology and
regulatory changes. Most health care service companies such as home care
or outpatient practices have been run as lifestyle businesses. They are
not equipped to deal with changes in reimbursement let alone large
scale industry reorganization into accountable care organizations. While
these sectors are all different, they all are wrestling with the same
issue - how to become more efficient in a technology dominated world
where the old fashioned way of doing things is no longer good enough.
These sectors present the best business acquisition opportunities in
2014.
By
Prashant SN
Business Acquisition Opportunities in 2014
Reviewed by fashion
Published :
Rating : 4.5
Published :
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