December 5, 2023

this More buyers drive M&A deals Sales rebounded after last year’s economic slowdown, demanding more information from sellers and a longer “profitable” period after acquisitions.

The number of deals across the industry will fall 8% this year to 315 deals, but is up from the 75 deals announced in the first quarter Q4 2022 Lows Falling stock and bond values ​​last year and fears of a potential recession, According to investment banks and consulting firms echelon partners. The number of transactions may increase even higher.Buyers have been hesitant about more than half of the potential deals they have considered over the past three years, and they told Fidelity Investments in an investigation last month.

income– Contract Terms Bundled Payments Future business beyond the closing date – often comes up in negotiations between potential buyers and sellers.Mismatch of expectations on either side may often derails deal negotiations Or, worse, lead to lengthy and expensive litigation between the parties According to experts, after the transaction was completed.

Patrick Bomhack, an attorney who works on mergers and acquisitions at the Milwaukee-based wealth management firm, said potential buyers are “doing more rigorous due diligence on potential sellers and being more selective in their acquisitions.” O’Neill, Cannon, Holman, De Jong and Ryan, said in an interview. The common belief among sellers is that they “will be compensated for what they have achieved” during their careers in the consulting business, but this is only “partially true”.

“Buyers want longer yield periods and want to allocate more and more of the purchase price to yield rather than paying cash at closing,” he said. “If you’re a seller in today’s market, you need Be prepared to commit to outstanding performance in the post-closing period to earn the full purchase price. …Sellers need to make sure they are working with a buyer they really trust and want to work with as a significant portion of the purchase price will depend on this The relationship is going well.”

Still, investors’ “smart money” e.g. private equity firms Boomhak points out that the money keeps flowing to registered investment advisory firms, “which is a land of opportunity for acquirers”. A number of announcements around the Fourth of July holiday reflect how continued momentum has helped major players scale.

The day before, New York-based Steward Partners Celebrating the tenth anniversary of the company Ten years after welcoming its first team, more than 200 independent advisors manage nearly $30 billion in assets. Steward Secures $50M Minority Investment From Cynosure Group $100 million in 2019 From the Pritzker Organization Two years later, plus a $140 million line of credit Led by Apogem Capital 2022.

Steward CEO Jim Gold said in a statement: “Key to our remarkable growth is our Equity Partner business model, which gives advisors the freedom to Clients do what is truly best.” “We firmly believe that the next 10 years will be even more fruitful as we continue to implement our long-term strategy.”

Morristown, NJ-based private advisory group that has received First external capital injectioni from Business Investment Management 2021resulting in one of 750 consultants acquiring another consultant’s business after his unexpected death. West Hartford, Connecticut-based WP Financial, which had four employees and $95 million in client assets, acquired Sage Financial Design following the death of sale company owner Robert Sheldon “Whitey” Thompson.

“Bob is a well-known figure in my hometown and his work provides a solid and respected foundation for financial planning,” WP Financial owner Bill Rabbitt said in a statement. “Our aim is to honor his legacy, minimize disruption to investors and enhance their planning support through technological advancement and innovation.”

last month, Most active wealth management acquirer According to reports, in 2022, Denver-based Mercer Advisors (Mercer Advisors) Valuation over $3 billion Participate in Altas Partners’ latest minority private equity investment. On July 5, the firm of more than 890 advisors and other employees managed $48 billion in client assets Indicated that it has acquired Day & Ennisis a Macon, Georgia-based RIA with $400 million in capital and approximately 250 client households.

Founder John Day said in a statement: “As my partners and I planned for the future, we realized we needed to scale our business and bring other expertise into our portfolio.” For us, it was a decision to either build our own or join an existing larger company that shared our mission, vision and values, as well as the added scale and additional in-house services we wanted.”