Last week I chaired the 7th annual World Financial Symposiums "Growth & Exit Strategies" event in London. It was quite a session with speakers and delegates from 13 countries. The networking and exchanging of thoughts and viewpoints was particularly thought provoking and productive.
The speakers were all in agreement that we have experienced a dramatic and much quicker than anticipated turnaround in all aspects of funding and exits. Venture capitalists are providing growth capital once again. Private equity investors are back (or never left). The IPO market is open a sliver. Valuations are up. And, (I project) the total dollar value of M&A transactions will double or triple in the next six to twelve months.
At the same time, I personally, and many of the fellow speakers and delegates, question the legs of this current rally. In regard to this overarching timing related question, I strongly suggest for vendors considering to exit in the next two or three years to check very closely the dynamics of their specific market segment. Risking to wait out an extra year or two may become a wait of four years or more if the current V-recovery we are experiencing turns out to be the first half of the W-recovery many of us fear.
Certainly, from our perspective, we at Corum have closed many transactions in the last few months and the buyer discussions confirm there is considerable pent up demand for acquisitions. On top of that, we have clearly seen an improvement in valuations while deal structures have been tending more toward cash. Most buyers have continued building up large cash reserves over the past twelve months which analysts, investors, and boards wish to be utilized for strategic acquisitions.
Another World Financial Symposiums event is taking place on Dec. 15 in New York City. Click here to see the great line up of speakers and more information.