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The Impact of the Financial Crisis on Middle Market Acquisitions

By: George Spilka
Posted: November 14, 2008

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For companies not yet in the market or ones at the very start of the sale process, whose fundamentals and business foundation are somewhat deficient, they might want to delay the sale while they strengthen and reposition the company. However, where there is no need to strengthen the company’s fundamentals or foundation, there is no reason why approaching acquirers should be delayed past the start of 2009.

Don’t be intimidated by acquirer’s “doomsday scenarios.” The financial crisis has not changed anything in the industrial sector of the U.S. economy. Most companies remain very profitable, and the intermediate and long-term business outlook remains good. Therefore, there should be no transaction price concessions. If patience is necessary, it will provide you a bountiful reward.

These are times when you truly need a strong-willed, determined, knowledgeable investment banker that understands the causation of the financial crisis and how it is likely to play out. They will provide you the proper guidance in how to proceed in these exciting, yet turbulent, times. If you have this strength and expertise on your team, you will get a premium price. Don’t let acquirers intimidate you, and don’t accept less than you deserve.

George Spilka is president of George Spilka and Associates, a national acquisition consulting firm specializing in middle market, closely held corporations. E-mail: spilka@nauticom.net; 1-412-486-8189; Fax: 1-412-486-3697 www.georgespilka.com