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Study shows convenience services M&A activity will be strong in 2023

With so many inquiries coming in from operators about selling their business in 2023, no study is needed to conclude that 2023 is going to be a busy year. But sure enough – such a study does exist.

Motivated to explore valuation

Many of the operators who have contacted us recently said they were interested in taking advantage of our recent partnership with Shelia Darby, MBA, CVA, MAFF, to provide third-party financial analytics and valuation assistance. The fact that the valuation is free for any operator who sells their company with VBB Advisors on their side, was an additional motivator.

Impact of baby boomers

The interest in selling a business in 2023 is not unique to the convenience services industry. The tsunami of baby boomers seeking to retire (that I have been talking about for a long time) is clearly taking shape. Additionally, the OCS industry is showing some signs of life and is expected to recover significantly in 2023. That is great news for sellers because the price for OCS operations has always been high due to the strong margins.

A credible study

The M&A study that I’m referring to was conducted by SS&C Intralinks (a leading financial technology provider for the global banking, dealmaking and capital markets communities) and Mergermarket (provides a respected independent mergers & acquisitions proprietary intelligence tool.

The clear conclusion of the study: The appetite for acquisitions is not going to end any time soon and certainly not in the next twelve months. Their surveys revealed that investors in North America are more bullish than their counterparts in any other region. Nearly 50% predict an increase in dealmaking and a further 29% are expecting to see a significant increase in 2023.

Strong M&A appetite

What does this data mean and why is it significant? It tells us that even with all the uncertainty in the world – a more volatile stock market, the war in Ukraine, inflation, supply chain issues, a lingering presence of Covid-19, mid-term elections and rising interest rates, buyers are still quite motivated. The belief by some that the pandemic and all the world maladies we just listed would dampen M&A activity, is simply not accurate.

Boost from business stimulus money

Another interesting aspect of the study relates to the impact of government stimulus money. About 47% percent of survey respondents felt that the COVID-19 economic stimulus activity actually intensified the interest in deal making. Numerous analysts on Wall Street believe that plenty of that government stimulus cash filtered into financial markets and private equity firms are still sitting on the sidelines, looking to put that cash to work.

More buyers than you think

What does this mean for an operator from “Main Street USA” who is ready to sell their coffee service, vending and/or micro market company? It means that there are more buyers out there than you think and it is a good time to start planning if you are considering the possibility of making a deal in 2023. That first step, after a confidential consultation with VBB Advisors, is to receive a competent and trusted valuation from Sheila.

We brought Sheila on board because we felt it was time to bring in a highly respected professional to perform our business valuations and at the same time, elevate the entire M&A landscape in the convenience services industry. Based on the study, our timing on elevating the valuation piece of our business could not have been better.

Good timing for sellers

If you are considering a sale of your business in 2023, your timing is excellent. We have a proven process at VBB Advisors that can easily allow you to accomplish your objective before the end of Q1 in 2023. The key to seeing that happen is to start the process now and enjoy the comfort of working with a sell side broker.

Trust is important

As a convenience services operator who has worked hard to build a business, often for decades, there is no reason to feel that deep discomfort that comes from a lack of trust. Is your broker favoring the buyer or the seller? That’s hard to say, but you’ll be asking that question long after the deal is finalized.

VBB Advisors – A sell side broker

You deserve better. The choice is simple. Work exclusively with the industry’s most experienced sell side broker. At VBB Advisors, we cringe at what “two sided brokers” like to say – “There has to be some pain from both sides in order to make a deal.” That is nonsense. As a seller, you should be feeling comfortable and confident that you received the best deal possible – a deal that was reached by putting our proven process to work.

Our Philosophy at VBB Advisors

“No matter what is going on with the economy or the world, it is time to sell your business if you are ready and we can make the right deal - a deal that makes sense for you, your family and your company.”

Buyers come to us because they know that we serve sellers who have thoroughly and thoughtfully considered their exit strategy with our 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 2022 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.

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