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A Time to Sell

By: George Spilka
Posted: June 7, 2011, from the June 2011 issue of GCI Magazine.

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3. The political and economic instability in the world at this time could provide the basis to produce an event that would have wide ranging repercussions.

4. There are many global “hot spots” that could erupt at any time. The impact of any of these events could produce fear and tremendous instability in the financial markets.

I am not saying that intermediate and long-term economic and market conditions will definitely be bad. However, I am strongly advising that a company considering selling should make that sale in the latter half of 2011 or 2012 due to the substantial risk facing the economy and acquisition market in 2014 and subsequent years. The risk factor is, simply, too great to delay a sale until 2014 in light of all the positive reasons why a sale should take place before December 31, 2012.

Summary

Although the 18-month period ending June 30, 2007, was the most lucrative time to sell a middle market company in more than 50 years, the latter part of 2011 and 2012 should present a great opportunity to sell at a premium price. This is true for the myriad of economic, tax, financial and market reasons.

George Spilka is president of George Spilka and Associates, a national investment banking firm based in Pittsburgh that specializes in middle market, closely held corporations. Advising since 1978, the company offers a broad-based service that advises clients through the entire acquisition process, and in preparing a company for sale. spilka@georgespilka.com; www.georgespilka.com; 1-412-486-8189