Eight months ago, facing a slow recovery and a possible recession, plenty of smart people believed that M&A activity in convenience services would slow to a crawl. Just the opposite has happened, and this summer is shaping up to be red hot for M&A.
When interviewed by Bob Tullio on Automatic Merchandiser’s Vending & OCS Nation podcast, “What is going on with all of these acquisitions,” I made it clear that right now, there are more deals happening, both big and small, than we have seen in a long time. Be sure to listen to the fifteen-minute podcast to get some insights and inside information on the state of M&A as it relates to convenience services.
Since that podcast aired in early June, I am happy to report that the M&A business climate, at least in the world of VBB Advisors, has not changed. There has been no summer slowdown. In fact, the interest in making deals from both buyers and sellers has only intensified.
Big, active players
Some of the bigger players, including Aramark and Sodexho, are more active than ever when it comes to acquisitions. Active buyers are more enthused than ever about growing their workplace refreshment businesses. In fact, the largest companies have put together acquisition teams for refreshment services.
A window of opportunity
What does this mean for operators? We have seen this type of M&A climate before. There is a unique window of opportunity for operators who are looking to sell their business, driven by several factors.
- The expected recession has not materialized.
- Interest rates are finally beginning to stabilize and are still at tolerable levels for the most qualified business borrowers.
- Operators are telling me that sales have rebounded to 2019 levels, in the vending, micro market and pantry service business. Coffee service is crawling back – has a way to go, but buyers are aware that OCS is trending in the right direction.
- Competition among buyers. The buyers I am dealing with are currently active in the business. They are established national and regional operators who want to grow. They are very optimistic about the future of the industry.
- The gig economy is slowing down according to Bank of America, which means people are returning to the workforce. That uptick in available labor has taken some pressure off operators. New hire availability should continue to improve as the demand for grocery and food delivery continues to soften.
A perfect storm
All these factors have created a positive market condition for sellers and that is good news, because there have been many operators waiting on the sidelines for the right moment to sell. They waited for Covid to be over. They waited for business to rebound. They waited to see if hiring pressure would ease up. They waited to see if there would be a recession. The waiting is over. What is beginning to emerge is a line of sellers who are ready to step up to the table. Combine the currently ravenous appetite of buyers with a fresh inventory of sellers and we have what can only be called “a perfect storm” for M&A activity.
Here is the question: Are you ready to get in on the action and capitalize on this window of opportunity for sellers? I have signed two new clients in the last two weeks that fit the seller profile that I am seeing on a consistent basis. They have been in business for over thirty years, often covering two generations. The owners are in their sixties, have worked hard and simply want to enjoy the next chapter of their lives. They want to spend more time with their grandkids. Does that sound like you?
Sharper pencils for buyers
In this competitive climate, buyers are becoming more astute and selective. They are sharpening their pencils and while valuations are still higher than ever, especially when there are multiple buyers interested in a deal, they are looking for strong, balanced and professionally run companies to acquire.
In this climate, as a seller, you can count on VBB Advisors to position your company and get it ready for sale. When it is ready, we will market your company in a way that will generate interest from multiple buyers. Once the buyer is identified, VBB Advisors will guide you through the process, making requested data easily available to the buyer. Ultimately, our approach – exclusively representing you, the seller – will result in a sale that will allow you to begin the next chapter of your life.
What Jodi Glimpse had to say
Once we connect for a conversation and you understand our process, I am confident you will come to the same conclusion as Jodi Glimpse of Camelback Vending, who recently sold her business to enjoy the next chapter of her life in Hawaii. “When evaluating business brokers, we saw that Mike is very data-driven, very structured, in the way that he goes about things. With Mike, his process is very systematic and we're big on that as well. When we started talking about his process, choosing Mike Kelner to sell our business was a “no brainer,” she said.
“Selling a business isn’t easy,” observed Glimpse. “I would highly recommend Mike Kelner and VBB Advisors. He is a straight shooter and was fantastic to work with. He did a great job for us.”
Take that first step
Buyers come to me because they know that I serve sellers who have thoroughly and thoughtfully considered their exit strategy with my help. That is the type of seller that you want to be – a seller who has their ducks in order, has taken steps to make their business as attractive as possible and a seller who values their employees enough to make a deal that everyone will feel good about.
Take that critical first step. That is often the toughest one to take.
Order my free 2023 Exit Strategy Planner. At the very least, it will provoke some thought, and this is a good time to think about your future.
Whatever your reasons are to sell your company - the timing, a sense of frustration, the desire to enjoy life or an interest in rewarding yourself for years of hard work – VBB Advisors can help you realize your goals.
I am Mike Kelner, the leading sell side intermediary in the convenience services industry. Let’s sit down and have a conversation. Use this appointment scheduler to set up a meeting with me.
Or – give me a call at 704-942-4621.