The end of the year is always a great time for reflection. What did you achieve in that time? What would you have done differently? What lessons can you take into the next 12 months?
When I look back on 2019 (and the end of the decade in general), words that spring immediately to mind are change. Progress. Growth. In 2010 we were still picking up the pieces following the global financial crisis, with the global M&A industry beginning to show signs of recovery.
As we approach 2020, things have almost come full circle, as we are still enjoying one of the most robust and sustained M&A seller’s markets in the past several decades. For both middle market M&A as a whole, and for our team at Generational Equity, it has been a decade of development, one that I’m deeply proud of.
Focusing back in on 2019, I’d like to use this article as an opportunity to highlight what we achieved at Generational and what these experiences have meant to me personally, as well as my thoughts on another interesting year in M&A.
Different Places, Same Goal
One of the biggest changes we faced as a company in 2019 was moving home for the first time in many years.
In August, Generational Group officially moved its corporate headquarters to the exciting, dynamic CityLine area in Richardson, Texas. Making such a major shift was not a decision we took lightly, but the additional space and its forward-thinking technology ensured it would prove an ideal environment to support our plans for growth.
Among our other ambitions for our new HQ was to create an atmosphere that would allow for effective team-building and give our associates room to develop. As a firm, we have always placed a high priority in providing an education in M&A, and the tools our team members need to reach their potential. In our fast-paced industry and the responsibility to our clients, this aim is critical.
I can safely say that the transition has been very successful so far. While getting used to a new environment over the last few months offers plenty of challenges, we’ve met these together while maintaining the same duty of care to our clients. After all, it is their commitment to our techniques and approaches that has allowed us to continue our growth.
Alongside this significant development, Generational Group expanded in other directions as well. Our offices in Southern California relocated to again offer more room for growth and support for our clients on the West Coast. And later in the year, we were delighted to welcome two new regional offices in Canada, in Toronto and Vancouver respectively.
Finally, in my 2018 recap I discussed our excitement at welcoming the former Talis Advisors to the Generational Family. In April we officially announced their rebrand as Generational Wealth Advisors, dedicated to developing personalized strategies that help people grow, protect and transfer their wealth.
It has been wonderful to expand our offering to clients by bringing an award-winning team into the fold, and working with their specialists in wealth management.
New Milestones & Accomplishments
Another reason why 2019 will stay with me for a while is the fantastic achievements our team received throughout the year. While our sole focus at Generational Equity has always been supporting our clients on the journey to exiting their business, I believe it’s important to acknowledge and celebrate these accomplishments because:
- They indicate that you’re working to an exceptional standard;
- They represent recognition from your peers; and
- They can be a powerful boost to team morale and motivation.
One milestone in particular stands out in my mind from the past 12 months. Generational Group surpassed $5 billion in wealth transferred to clients. With our work dedicated exclusively to transactions in the middle market, this landmark was an outstanding achievement, and a testament to our talented associates.
What means so much to me personally about that number is that every cent of it went some way to supporting our clients in departing their business. Helping them achieve their goals. Find their freedom. Secure their legacy. It is also a signal of the sustained strength of the seller’s market across this year, as this comes barely a year after we surpassed the $4 billion mark.
As well as this milestone, Generational Group received a great deal of recognition throughout 2019 from organizations I have the utmost respect for. At the 18th annual M&A Advisor Awards that took place in November, our firm was honored with several awards, including:
- Private Equity Deal of the Year $75MM to $100MM
- M&A Deal of the Year $50MM-$75MM
- Corporate/Strategic Deal of the Year $25MM to $50MM
Furthermore Phil Pizzurro, Managing Director Mergers & Acquisitions at Generational Capital Markets, was named an Emerging Leader by The M&A Advisor. It means a lot to me that we are giving the next generation of M&A leaders a platform to hone their skills and practice their trade at a high level.
Earlier in the year, Generational Group won 2 International M&A Awards:
- Cross Border Deal Of The Year ($10MM To $25MM)
- M&A Deal of the Year (Over $50MM To $100MM)
And, last but certainly not least, my son Ryan was honored by Hugh O’Brian Youth Leadership, an organization dedicated to the development of our next young leaders, with their highest accolade – the Albert Schweitzer Leadership Award. As both his colleague and his father, I am deeply proud of Ryan for this latest accomplishment.
Every achievement was a moment for our team to savor, and their tireless hard work continues to be recognized in 2020 and beyond.
M&A Activity in 2019
So that’s a glimpse into what 2019 was like at Generational Equity. But what has been happening in the wider world of M&A in the past 12 months?
As I noted earlier, the theme of the year for M&A in my eyes is one of durability. At the start of the year, a big question that many were looking to answer was how long will the seller’s market last after a stellar 2018. The fact that we’re still waiting to find out is a testament to how robust M&A activity has remained throughout 2019, and some predict this to remain the case for the foreseeable future.
This strength and stability of M&A activity across the year has been bolstered by several key trends. Private equity investment undoubtedly played a key role. It is anticipated by many that when the final figures are released in the new year that 2019 will be a record year for PE fundraising.
In a time of relatively tepid economic expansion in the U.S., investors are increasingly turning to private equity as it continues to generate great returns. This has been supported by a continued rise in add-on acquisitions, where PE firms focus on acquiring a range of smaller, middle market companies to reinforce the development of a larger platform company.
Another prevailing trend has been the continuation of cross-border M&A activity. in their 2019 report, Baker Tilly International discussed the rising value of cross-border transactions for business owners looking to maximize their exit plans.
They also look forward to the future, with 54% predicting a rise in M&A activity, predictions that middle market deals will account for 67% of deal volume in 2020, and 71% expecting to increase their cross-border activity. I anticipate we’ll see even more deals that transcend borders in the new year, despite heightened geopolitical risks.
2020 Vision
2019 provided a terrific end to the 2010s for myself and our team at Generational Equity. And while it has been great looking back on this year’s successes and developments, in the M&A industry we always need an eye to the future.
The sustained strength of this seller’s market should continue to inspire business owners considering their exit plans for the early stages of 2020. But while we can enjoy this for the time being, a hard truth about seller’s markets is that they don’t last forever.
My advice to anyone reading this who is considering the future for themselves and their company is to at least put an exit strategy in place – even make it a New Year’s Resolution if you must! Because even during the most robust seller’s market imaginable, if you are not prepared to exit, you won’t achieve an optimal offer when you do decide to leave.
So here’s to a new year and a new decade, and I hope that this one will be just as memorable, both for us at Generational Equity, and for you in your own endeavors.