2023 M&A - OCS coveted, vending is relevant, technology sizzles
2023 is going to be a busy year in the M&A world. In this portion of a November 18th Q&A interview with Bob Tullio, we looked into the crystal ball and for operators who are considering a sale of their business, the outlook is positive. See the entire interview here, which includes a review of 2022 and a look at 2023
The “baby boomer tsunami”
Bob: Did you see that tsunami of baby boomers ready to retire; did that wave start to gain speed and momentum in 2022?
Mike: I'm seeing a lot more inquiries and a lot more listings and these sellers are often 60 to 65 years old. I have one client right now who is 84. If you look at it from a demographic point of view, that baby boomer generation right now is 70 million people strong and it's forecast that their business sales will be the greatest transfer of wealth in human history as these people make a move. Not just in our industry, but across all industries. We're seeing it happen and it is going to make 2023 very exciting.
Outlook for 2023
Bob: How exciting?
Mike: I believe that 2023 will be the busiest year that I've ever had. Just based on the pipeline and the inquiries that I'm seeing daily; I think it's really going to be busy. A lot of operators wanted to sell in 2019, 2020 and they've had to wait. They are just at the point where they're tired of waiting, it's time to get something done and they're ready. I'm seeing a lot of that. There was pent up demand that couldn't be satisfied until we got out of COVID.
OCS is coveted
Bob: You wrote last month that OCS is still coveted by buyers, largely because of the great margins. Do you see that being the case as we move into 2023 and hopefully larger office populations?
Mike: I do. Office coffee took a big hit, but as it comes back, the beauty of office coffee is low capital expenditure to grow, recurring revenue streams, low service requirements – many factors that make it attractive not only to strategic buyers, but also financial buyers like private equity folks. OCS will be in demand in 2023.
Vending – still relevant
Bob: What about vending? Does that have a future in 2023 for attracting buyers?
Mike: Absolutely. There was this mass exodus from vending into micro markets, but now some of those locations are moving back to vending for a variety of reasons, including reduced employee count. Cashless technology has also been a positive for vending and buyers want to see it.
Micro markets – “the technology sizzle”
Bob: One of the things that attracts buyers to our industry is the micro market industry. Is it the technology that makes it so attractive?
Mike: Definitely. I think it will continue to evolve. The technology is something that makes our business attractive to private equity in particular – the technology sizzle, if you will. Also – it is scalable without a lot of capital expenditure. Buyers love the micro market channel.
Why operators need an advisor
Bob: Operators are confident entrepreneurs, and I imagine many think they can sell their company on their own. I'm sure you hear it all the time. Is it a mistake to go it alone?
Mike: Yes, absolutely. You can sell anything yourself, but will you get the best outcome? Frankly, there are some major reasons why you don't want to do it yourself and the first is objectivity. There is a reason why athletes have agents, comedians have agents, musicians and authors have agents. An objective third party is able to execute a transaction without all the emotional baggage that goes along with being the owner
The second reason: I have done hundreds of transactions, so there's just the factor of experience, knowledge of purchase agreements, considerations of allocation of purchase price. There's a whole multitude of considerations that are often overlooked by sellers. So, that is a big reason why large operators, sophisticated businesspeople, are using VBB Advisors.
Working on the sell side of the table
Bob: You call yourself a “sell side” broker, one who only represents sellers. Why is that so important?
Mike: I am fully invested in making sure that sellers in the convenience services industry receive the best possible price, along with the terms and conditions that satisfy their needs. My interests and the seller’s interests are completely aligned. As an intermediary, you can’t serve two masters.
VBB Advisors is well connected with private equity firms and operators who seek acquisitions. That is part of the VBB Advisors advantage, but those buyers know that once I connect them with a seller, I will be working on the seller’s side of the table exclusively.
Bob: If operators have their own questions not covered here, where can they reach you?
Mike: I am happy to answer any questions. I can be reached at (704) 942-4621 or firstname.lastname@example.org
Take that critical first step. That is often the toughest one to take. Order our free 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.
We specialize in sell-side advisory services and mergers & acquisitions. Our focus is on maximizing the realized value on behalf of our clients. VBB manages the entire process from valuing your business, assembling information, to qualifying prospective buyers, through due diligence, legal documents and closing. Our process is entirely confidential in order to protect the interests of our clients.
WHAT CLIENTS ARE SAYING
Mike Kelner was a Godsend to us, we have been thinking about selling our company for a few years but dreading the process, we procrastinated. We got Mike's number and called it. I cannot believe how fast, professional and kind he was. He found a buyer within a few weeks and we closed in a month. He was with us every step; he always returned calls and emails within minutes. I am so thankful for Mike, he was fantastic! Thank you Mike for everything! You are THE BEST!
— Greg and Connie Durheim, Fort Worth, TX
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Financing Assistance. VBB will provide assistance to businesses in the acquisition of various types of financing. Services include preparation of loan packages and presentation to various funding sources.
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