Quarter Three Middle Market M&A Report 2020

Quarter Three Middle Market M&A Report 2020

 

LUTZ BUSINESS INSIGHTS

 

QUARTER THREE MIDDLE MARKET M&A REPORT 2020

Quarter Three Middle Market M&A Report 2020

The lower middle market deals in Q3-2020 rebounded from the steep decline realized in Q2 when the spread of COVID-19 triggered global lockdowns and brought businesses to a standstill. The critical phase of uncertainty seems to be over, resulting in increased willingness to engage in transactions. The total value of lower middle market deals (transaction value less than $1 billion) announced in Q3 was $74.3 billion – 213.2% above Q2. Transaction volume also increased 18.0% q/q to 2,761, but was still down 12.0% y/y.

While not reflective of a full recovery, the uptick in M&A activity in Q3 highlights the sellers and buyers’ renewed interest for deal-making. Corporations and financial sponsors turned back to the M&A market mid-summer to either revisit deals left on hold at the height of the coronavirus pandemic or to pursue new opportunities mostly focused on COVID resilient sectors such as technology, industrial services or healthcare. Additionally, value investors sought to capitalize on distressed M&A and drive post-COVID-19 growth.

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Lutz adds Holzworth and McKeon to Omaha Office

Lutz adds Holzworth and McKeon to Omaha Office

 

LUTZ BUSINESS INSIGHTS

 

Lutz adds Holzworth and McKeon to Omaha Office

Lutz, a Nebraska-based business solutions firm, welcomes Sydney Holzworth and Joe McKeon to its Omaha office.

Sydney joins the firm as a Recruiting Coordinator. As a member of Lutz’s Human Resources team, Sydney will be involved in coordinating campus recruiting programs as well as recruiting internal employees. Holzworth received her Bachelor’s degree in public relations and communication from the University of Nebraska-Lincoln.

Joe joins Lutz’s M&A division as a Financial Analyst. He specializes in merger and acquisition advisory services and business valuation. Graduating from the University of Notre Dame, McKeon received his Master’s degree in business administration.

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Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

2021 – Is This the Year to Sell Your Business?

2021 – Is This the Year to Sell Your Business?

 

LUTZ BUSINESS INSIGHTS

 

2021 – IS THIS THE YEAR YOU SHOULD SELL YOUR BUSINESS?

2021 – Is this the year to sell your business?

bill kenedy, LUTZ consulting and m&a shareholder

 

Lower, middle-market business owners faced a number of challenges navigating through the pandemic in 2020. Many that were in the process of selling their business had plans put on hold or deals derailed by Covid-19. With the vaccine starting to become available and the likelihood of the crisis settling down in 2021, those owners will likely attempt to restart their sale processes. For those considering a sale transaction, what does the world of mergers and acquisitions look like?

 

Uncertainty Surround Us

There are many uncertainties: Have valuation multiples changed? How will buyers view the business if it has not returned to pre-Covid profitability? If the business improved during Covid, will buyers assume that success will continue? While these questions are important, the most significant factor to consider in the near term is: what will happen to tax rates?

 

Proposed Tax Rates

With a Democratic President, House, and Senate, there is a reasonably good chance that some, if not all, of President Biden’s tax proposals will be implemented. The most important item for business owners considering a sale of their business relates to the proposed higher maximum rate on long-term capital gains. 

Under current law, the maximum Federal tax rate on capital gains is 23.8%. Under the Biden plan, net long-term gains for those with taxable income above $1 million would be taxed at ordinary rates. Biden proposes to raise the highest ordinary rate back to 39.6%. That, along with the 3.8% net investment income tax, would result in a Federal tax rate on the capital gain from the sale of a business of 43.4% (assuming the owner has gain/income over $1M). That is an 82% increase in Federal tax on the capital gain from the sale of a business. It is too early to know if this proposal will pass, and if it does, when it would become effective.

 

Contact Lutz M&A

Clearly, this is a critical looming issue for business owners. It seems illogical that a new administration would implement this with an economy struggling to recover from a pandemic. But we have witnessed quite a few things we didn’t think would happen in the last year or so, haven’t we! If you would like to discuss your business and these issues with Lutz M&A, please contact us.

ABOUT THE AUTHOR

bill kenedy

402.492.2132

bkenedy@lutz.us

BILL KENEDY + LUTZ CONSULTING AND M&A SHAREHOLDER

Bill Kenedy is a Lutz Consulting and M&A Shareholder at Lutz. He specializes in business valuation, litigation support, and merger and acquisition advisory services.

AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
  • American Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
  • Accredited in Business Valuation
  • Certified in Financial Forensic
  • Certified Exit Planning Advisor
EDUCATIONAL BACKGROUND
  • BSBA in Accounting, St. John’s University, Collegeville, MN
COMMUNITY SERVICE
  • Construction Financial Management Association, Past Treasurer, Board Member
  • A Time to Heal (non-profit focused on cancer patients), Past Board Member
THOUGHT LEADERSHIP

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We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Completing an M&A Deal 101

Completing an M&A Deal 101

 

LUTZ BUSINESS INSIGHTS

 

Completing an M&A Deal 101

completing an m&a deal 101

When it comes to selling a company, the business owners really should ask themselves – “Why would someone acquire my company? What are they really purchasing? How much is my business worth?” In this webinar, Bill Kenedy and Dani Sherrets of Lutz M&A walk you through the M&A process, EBITDA and EBITDA Adjustments, and give you a few key M&A tips that will lead to a successful completion of an M&A deal.

RECENT POSTS

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

What You Need to Know About Forming an ESOP

What You Need to Know About Forming an ESOP

 

LUTZ BUSINESS INSIGHTS

 

What you need to know about forming an esop

what you need to know about forming an esop

Business owners sometimes overlook the option of selling their company to an Employee Stock Ownership Plan (ESOP). Although this option may not be right for all businesses, it can be a very attractive and flexible alternative for the right type and size of business. In this presentation, Bill Kenedy of Lutz M&A outlines the best type of candidate for ESOPs and covers the key benefits.

RECENT POSTS

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Paycheck Protection Program + Loan Forgiveness

Paycheck Protection Program + Loan Forgiveness

 

LUTZ BUSINESS INSIGHTS

 

Paycheck Protection Program + Loan Forgiveness

paycheck protection program loan forgiveness

The Paycheck Protection Program (PPP) is designed to provide a direct incentive for small businesses to keep their workers on their payroll by offering financial assistance through a loan. As helpful as this program has been, business owners nationwide are struggling to understand the loan’s forgiveness policy and regulations. In this presentation, Bill KenedyMichael Greteman, and Mark Otte cover calculation tips, as well as how to optimize and attain forgiveness.

RECENT POSTS

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850