Large companies, and some smaller companies have been growing by acquisition for centuries. After all, acquisition is faster, cheaper, less risky, and easier to finance than are traditional growth strategies.

2 + 2 = 5: In a well executed acquisition, the acquiring company can take advantage of synergies. That is, the two companies together will be stronger and more profitable than either company was previously.

Today, the acquisition advantages are even more profound. The troubled economy has created some very attractive acquisition opportunities for aggressive, growth oriented business owners.

• Valuations--for years, business valuations were sky-high. Suddenly they are back down to earth; there are even bargains to be had.
• Some good companies have to sell—. Some companies are not worth buying at any price. However, there are now some very good companies that are under pressure to sell for a variety of reasons, based upon our troubled economy.
• Can’t get working capital loans—credit markets are all but frozen. Even some stellar companies are unable to get the working capital loans that are the lifeline of many businesses. Selling may well be a better option than letting a business succumb to the strangulation caused by lack of the debt capital that is the lifeblood of the business.
• Temporary revenue downturn w/o financial strength to see it through
• Fence sitters, now frustrated enough to pull trigger
• Fear—You can’t blame someone for being a little fearful about the economic future. Every day we hear new scare stories of businesses in trouble and more trouble to come. Some business owners just want to take some of their money off the table, and are willing to entertain offers that they wouldn’t have considered a year or even 6 months ago.
• Nearing Retirement—It’s very common that a business owner approaching retirement looks to the sale of his business with ambivalence. It seldom happens that someone will make an absolute sell decision and then start implementing it. More commonly, a business owner will consider selling his company and go back and forth evaluating the pros and cons. But most business owners who are even considering retirement are far more risk averse than they were even a few years prior. Running, never mind growing, a business in this economy involves risk. Retirement age sellers who were ambivalent are now ready to sell.
• New Administration—Business owners view new presidential administrations with a bit of skepticism. What will happen with taxes? How about health care costs for employees? What about import, export and a hot of other regulations. A change in administration always tips some fence sitters toward selling. In this case, the usual uncertainty of a change in the White House magnified by the economic situation; more sellers and more opportunity for business buyers.