As this article is being written during the third week of March, there are many reasons why middle market owners wanting to sell their companies during the next ten years should consummate a sale no later than 2014, preferably sooner. Although most points discussed in this article pertain with equal relevance to all companies regardless of size, the article is primarily directed at middle market companies, which are firms with transaction values between $5 and $250 million.
I am more optimistic about the prospects for the short and intermediate-term (the next 2-3 years) acquisition market than I was last year, when I syndicated an article on the then current state of acquisitions. 2012 should be the best time to sell a company because of the likelihood that market conditions will be strong. They will probably continue that way through 2013 and quite possibly 2014. After that, the market becomes problematical. However, I am much more negative about the long-term than last year. I expect a severe downturn to occur that will have a devastating impact on the U.S., and probably the global, acquisition and financial markets sometime before the end of the decade. Its impact is likely to be far worse than the Great Recession and will be triggered by either a major event or a confluence of events. The impact will probably exceed any business collapse since the Great Depression. The economic conditions it creates are likely to remain for an extended period of time, much longer than from the Great Recession. These conditions will have a significant damaging impact on the market value of U.S. companies. When it happens it will start suddenly and unexpectedly, just like in 2008. The public will express shock and amazement as they did then. No one saw that coming either.