Watermark Wire

In this 8-minute video, Hagen Rogers continues to share examples of “fumbles” and “landmines” that sellers make that ultimately lead to painful outcomes when selling a company.  In this segment, Rogers spotlights bad choices made relating to strategy, culture and valuations.

As M&A practitioners, we see the poor decisions made by business owners year in and year out.  We call them “fumbles and landmines.”  These decisions are made even though business owners lead well, know their industry and business like no other. However, as the famous saying goes, “history doesn’t repeat, it rhymes.”  In this first…

The Silver Tsunami: Anticipating a Flood in M&A Activity The concept of a “Silver Tsunami” has garnered significant attention in the mergers and acquisitions industry for many years, driven by the expectation that the impending retirement of the Baby Boomer generation will lead to a surge in owners selling their businesses. This report aims to...

Our latest report dives into the intricacies of the sell-side M&A market in the Palmetto State. Discover key trends, industry breakdowns, and expert insights to help you navigate your exit strategy. DOWNLOAD THE FULL REPORT

The distribution industry, a $11.6 trillion powerhouse, is adapting to a new reality. While recent years have seen modest growth, the future looks bright with a projected CAGR of 2.2% by 2028. This growth is fueled by strategic mergers and acquisitions (M&A) and the adoption of cutting-edge technologies like AI. This report dives into the key...

U.S. M&A activity in Q1’24 points towards a market teetering on the edge of a potential rebound. Q1’24 had mixed results, with aggregate deal value rising significantly while deal volume declined YoY (measured as the total number of M&A transactions announced). This period was marked by a surge in mega-deal activity, signaling revived confidence among...

Economic growth in the last quarter of 2023 was stronger than expected, leading to hopes for a ‘soft landing’ in Q1’24 for the US economy. While a robust stock market performance during the first quarter increased investor optimism, inflationary pressures, a delay in rate cuts, and rising concerns over national debt levels have signaled an...

In 2012, Flamel Technologies acquired Eclat Pharmaceuticals with a 100% contingency payment offer. Elcat was lured into a deal with a significant upside to their shareholders. What happened subsequently is a lesson for Dealmakers and Sellers. This is an important story with lessons for those pursuing M&A’s.

Reflections on the 2023 M&A Market US transaction volume fell by 30.3% from 2022 to 2023, dragging aggregate transaction value down from $2.98 trillion to $1.83 trillion over the same period. Throughout 2023, M&A activity remained sluggish. According to S&P Global, early in the year initial optimism for a broad M&A recovery waned due to...

Lagging Economic Indicators               Real GDP growth over the last four quarters has increased 2.9%, bolstered by exceptionally strong growth in the third quarter of 2023. The value added of private-goods producing and private-services producing industries increased 10.2% and 4.1%, respectively, while government increased the slowest at 2%. However, projections suggest a notable deceleration in...

In 2017, when it was announced that Amazon would acquire Whole Foods, Wall Street loved this strategic move so much that the market caps of both companies rose $14.3 Bn in 1 week.  However, Amazon overlooked cultural differences and therefore made poor integration decisions, resulting in heartburn after the dust settled.

  Table of Contents Market Retreat Overview Spotlight on Acquisitions of Buyers Headquartered in SC, NC, GA & TN 2023 Spotlight on Sellers Headquartered in SC, NC, GA & TN – 2023 It’s been many months since we shared our outlook on market conditions. A good starting point is what is plaguing the global economy....

There are so many fumbles that can happen in due diligence. Fumbles, and landmines, result in poor integration, leading to ROI failure.

Why is it that so many owners regret, in hindsight, having sold their business? Here are a few real-world examples.

How does the M&A market handle global shocks and economic uncertainty? To what degree should that affect timing your next transaction?

Sellers and even many infrequent acquirers proceed in negotiating deal terms, unaware of a financial arbitrage that often occurs at the M&A closing table.

Why does the conventional approach to M&A (“the parachute approach”) come up short so many times? Watch this brief video to learn why.

There are countless exit planning organizations and consultants. However, we have found that one vital practice is missing in most. We learned this the hard way. Watch our latest Wire video to learn more.

One of the first questions business owners ask when contemplating a sale is one of timing. In this latest Watermark Wire video, Hagen Rogers shares how the readiness question can be answered by considering a framework of 8 attributes no matter the industry and stage of your company. Whether it is the right time to…

Is M&A decoupling from the economy? If so, what does that mean for 2023? In this latest Watermark Wire video, Hagen Rogers explores how and why mid-sized companies are seeing fewer M&A transaction volume but higher M&A transaction multiples. He then offers practical advice for BOTH acquirers and sellers.

Over the last 50 years, there have been two identifiable periods of stagflation: 1973-1975 and 1978-1982. We have entered another period of stagflation, which means the US economy is faced with the dual headwinds of high inflation and slow economic growth. On July 13th, the Consumer Price Index was reported to be 9.1%, which is...

In the dizzying world we work in currently, we often don’t stop and look back at history to learn lessons. The team at Watermark has been researching prior recessions and how they influence M&A transaction outcomes. This current economic downturn is driven by (1) a massive, unprecedented injection of M1 and M2 money supply after...

There are numerous economic indicators that are pointing towards recession or stagflation. As discussed in our previous Wire article titled M&A and the Economy Part 1: Americans are Getting Poorer, price increases driven by rampant inflation and the energy sector crisis (gas, natural gas, diesel fuel supply demand imbalances) are hurting the American public, and...

We want to turn our attention to recent economic developments as conditions in the US continue to worsen. The M&A market is not immune to these worsening conditions. There is a lot to cover on this issue, so this topic will span over several articles. Today, we’d like to focus on macroeconomic indicators that are...

Section 1202 was enacted in 1993 and was meant to help encourage investment in small businesses. Put simply, Section 1202 allows individuals to avoid 100% of the federal capital gains tax incurred upon the sale of qualified small business stock (also known as QSBS), given the shareholder and business have met the (many) requirements that…

M&A Had a Banner Year in 2021 There is no question that 2021 was a year for the record books in the M&A marketplace. In the US, over 18,500 M&A transactions closed vs. 14,800 in 2020. After a dramatic drop in M&A volume in 1H’20 due to COVID-19 rearing its’ ugly head, the M&A market...

Family offices continue to grow in prominence in the world of M&A and are increasingly competing against PE firms and strategics for acquisition opportunities. Single-Family Offices (SFOs) manage wealth of a single-family or individual. Multi-family offices (MFOs) are designed to provide similar services to their SFO counterparts but to a number of wealthy families. According...

The capital gains tax has been a topic of debate for many years, as both individuals and business owners must take these one-time taxes into account when exiting investments. Among other tax hikes currently proposed by the Biden Administration, the proposed Federal long-term capital gains hike under consideration for assets sold greater than $1MM is...

Who is CFIUS? Much has been written and spoken about foreign companies with ties to communist governmental regimes acquiring US-based companies. This article discusses how the US government protects our country’s national security issues when M&A transactions are suspect. Many may not know that there is a body within the U.S. government that is devoted...

We are pleased to share Watermark’s inaugural M&A Wire for 2021. Back to Fundamentals: Comprehensive M&A Expertise a Rarity, but also a Requirement M&A continues, as it always has been, to be a risky endeavor. If any one area in M&A goes sideways, that can spell trouble. Considering M&A involves so many processes and skills,...

A fascinating mergers & acquisitions topic rarely written about is, how would a business owner know if the advice they are receiving from M&A bankers is biased. Does the advice favor the owner or the banker? From my experience, most business owners do bounce the decision to sell off family members, respected peers, professional advisors,…

COVID-19 is impacting how practitioners value target companies for M&A purposes. How are valuation practices changing and what stays the same? Let’s take a look. Guideline Publicly Traded and M&A Transaction Comparables methods’ influence over a final valuation range should be reconsidered during this crisis. First, looking at the M&A Transactions method, Revenue and EBITDA…

Hagen Rogers is the Executive Managing Director at Watermark Advisors, LLC. Watermark prides itself on its “Southern style” approach to M&A. Knox Kiernan, an intern at Watermark, interviewed Rogers to learn more about this unique, relational approach. (This interview is also available as a podcast.) Our discussion today centers around the idea of Southern style…

We’ve compiled six months of data on the top recent M&A transactions in the Carolinas and Georgia. Table of Contents Aggregate M&A Summary – Last Six Months Carolinas & Georgia Transactions By Sector Most Active Acquirer by Total Transaction Size Regional Merger & Acquisition Valuation Summary Regional Number of Deals by Transaction Range Last Six…

We at Watermark want to contribute to the developing COVID-19 situation by sharing facts and opinion on how this global development is affecting M&A markets. The information table below should be no surprise regarding a slowdown in closed United States M&A transactions year to date through March 15th. Interestingly enough, M&A transaction announcements are up…

Table of Contents Crowdfunding Overview Crowdfunding Transactions in Carolinas & Georgia in 2019 Private Placements in Carolinas & Georgia June – December 2019 The Jumpstart Our Business Startup (JOBS) Act, enacted in 2012, allowed startup companies and small businesses to offer and sell securities to the general public through crowdfunding. The Securities and Exchange Commission…

The We Company has received a lot of press coverage in recent months after a failed IPO shocked many in business and financial markets. Last week’s announced acquisition of The We Company by SoftBank prompts the question, “Is SoftBank shrewd or a sucker?” SoftBank Group, headquartered in Tokyo, operates 6 business segments: telecommunications in Japan,…

Frequently, I hear comments from the business community like “John wants to sell the company, but I can’t convince him to meet with an M&A advisor about it.” Meanwhile from the M&A deal community I might hear after a transaction closes, “buyer demanded concessions as a result of their due diligence findings. It was stressful…

We’ve compiled six months of data on the top recent M&A transactions in the Southeast and in the US. Table of Contents Southeast Transactions Major US Transactions Major Canceled Transactions About Watermark Advisors Southeast Transactions M&A Closed Date Buyers/Investors Primary Industry [Buyers/Investors] Geographic Locations [Buyers/Investors] Target/Issuer Short Business Description [Target/Issuer] Total Transaction Value ($USDmm, Historical…

Every M&A client has a unique story. Watermark’s most recent M&A client, kVA, had a fascinating one. On June 3rd, Underwriters Laboratories, also known as UL, announced that it had acquired kVA. This announcement ended one stage in the life of kVA as it turned the page and started a new one. kVA was formed…

Unfortunately, one downside of M&A advisory success fees is that while it ensures that the transaction advisor gets paid “fairly,” the acquirer does not necessarily benefit proportionately. The matter not taken into consideration is that acquirers often struggle to capture a return on investment from acquisition transactions above a hurdle rate. Numerous studies have analyzed…

We’ve compiled six months of data on the top recent M&A transactions in the Southeast and in the US. For the first time, we’ve also including data on major canceled M&A transactions. Table of Contents Southeast Transactions Major US Transactions Major Canceled Transactions About Watermark Advisors Southeast Transactions M&A Closed Date Buyers/Investors Primary Industry [Buyers/Investors]…

When a business owner desires to sell a company for top dollar, (s)he needs to understand the importance of having future growth plans for the business. One factor that can boost growth is if the business operates in a high growth industry where the compound annual growth rate (“CAGR”) is 10% or more. Examples of…

Companies seeking to succeed at making profitable acquisitions need to plan for the reality that while most deals take less than a year to transact, becoming deal ready takes years. Companies that are well prepared will have a much higher success record and achieve better return on investment. Whether you have plans to acquire a…

Earlier this year, The National Center for the Middle Market at Ohio State published a report titled “Middle-Market M&A – What Executives and Advisors Need to Know in Order to Make the Most of Mergers and Acquisitions.” Participants in the study included 400 executives of middle market companies (with annual revenues from $10MM – $1Bn)…

What’s in this Issue Summer has just begun but it is already hot here in the Southeast! What has also been hot so far in 2018 is the M&A marketplace across the United States. In this issue, we update readers on the state of M&A and private placements so far in 2018 in the Carolinas,…

On May 9, 2018, Extreme Networks (NasdaqGS: EXTR), a San Jose, California based networking company, saw a 26% drop in its stock after it released 3Q’18 earnings (for period ending March 31, 2018) the previous evening. In the earnings release, there was a 23.81% downward earnings adjustment. This included a $1MM surprise revenue adjustment tied…

On April 12, 2018, Amazon.com, Inc. completed the acquisition of Ring, Inc. for $998.89MM in an all-cash deal. Ring Inc. was incorporated in 2013 and is based in Santa Monica, California. Ring Inc. manufactures video doorbells for homes. Its video doorbell lets users answer from anywhere in the world using Smartphone and Android devices. It…

What’s in this Issue For 2018, we’re focusing the Watermark Wire on industries where we have seen the most momentum in recent years: Chemicals & Materials, Manufacturing and Distribution. With each industry, we’re selecting a leader and sharing the strategies behind their current success story. In this issue, we’ve also compared and contrasted the recent…

Southeast Acquirers Active in Q2’17 Transactions Q2 2017 saw a total of 154 closed M&A transactions of Carolinas and Georgia headquartered companies, totaling $9.1Bn in deal value. Of the closed deals, three were greater than $1Bn, two were between $500-$1Bn, seven were between $100MM-$500MM, 36 were less than $100MM, and the majority of these deals…

Bob Bruner is a University Professor at the University of Virginia, Distinguished Professor of Business Administration and Dean Emeritus of the Darden School of Business.  He is the author, co-author or editor of more than 20 books on finance, management and teaching.  As a financial economist, Bruner is best known for his research on mergers…

Q2’17 saw a total of 91 successfully closed private placement capital raises, totaling just over $940.3 MM, across North Carolina, South Carolina, and Georgia. Across all three states, the Information Technology sector led the way in terms of total deal value with 27 capital raises, totaling $501MM. Q2 2017 Capital Raises by Sector: NC, SC…

Many entrepreneurial companies seek to become backed by venture capital (VC) because such backing signals strong buy-in from a large investor asset class who believes in the company’s business model. Venture capital also helps a company grow. But, as many know, the venture capital community is tight-knit. For companies seeking VC for the first time,…

M&A is a complicated process requiring unique skills and difficult decision-making.  According to the 2017 Private Capital Markets Report, (produced by Pepperdine’s Graziadio School of Business in January 2017 and covered the deal making market over the previous 12 months) 35% of all 2016 sell-side M&A transactions did not close.  The number one reason, explaining…

Table of Contents Historical M&A Transactions Market Summary Nationwide Disclosed M&A Transactions Southeast Disclosed Transactions Southeast Transactions by Industry Consumer Discretionary Healthcare Industrials Information Technology Materials Historical M&A Transactions In 2017, US M&A deal volume is expected to reach its highest level since its last cyclical peak in 2007. However, total closed M&A deals, measured…

Q1 2017 saw a total of 105 successfully closed private placement capital raises, totaling just over $817MM, across North Carolina, South Carolina, and Georgia. Across all three states, the Information Technology sector led the way with 35 capital raises, totaling $337.19MM, in Q1 2017.

At the 5th annual DIG South Innovation Conference in late April 2017, a host of young, hopeful companies presented promising business concepts to many different classes of investors. The investors were themselves hoping to run into avant-garde opportunities. In one session, “Investing in the South – The Current State of Deal Flow Around the Region,”…

We’ve compiled all of the data on Q1 2017 nationwide M&A transactions. Read the report.

Business owners who sell their companies often end up regretting their transaction. PriceWaterhouseCoopers conducted a survey with business owners who had previously exited. The results of their survey proved that 12 months after selling, 3 out of 4 business owners surveyed “profoundly regretted” the decision to sell. This Wire delves into a major reason for…

To receive strong market interest from acquirers, financial results and momentum are critical when selling a company. Watch a video with Investment Banker Hagen Rogers discussing these key areas with a South Carolina businessman who recently sold his company. Are you interested in learning more about preparing your business for a sale? Contact Us to...

The business world is more competitive than ever. That’s especially true for entrepreneurs and privately owned businesses. Success depends on a number of factors, not the least of which is raising money and securing investors. What exactly is the best way to capitalize your business for desired growth and scale? On the subject of fundraising,…

Failure in mergers and acquisitions (M&A) is pervasive. There are many contributing factors, but according to a survey conducted by Watermark Advisors, the three most common reasons for this are: (1) cultural issues leading to the loss of key people from the target, (2) overpaying for target, and (3) integration issues. Let’s take a closer…

The challenge that acquirers have in being successful in mergers and acquisitions (M&A) is significant. There are many contributing factors, but according to a survey conducted by Watermark Advisors, the three most common reasons for this are: (1) cultural issues leading to the loss of key people from the target, (2) integration issues, and (3)…

According to the 2016 Private Markets Report published by Pepperdine University, over the past year, approximately 35% of deals terminated without transacting. The number one reason (40%) was that the buyer and seller could not agree on pricing.