PEI Cites 8 Attributes of Quality Deals

Quality deal flow is among the top concerns for M&A advisors. A recent blog posted by Private Equity Information offers 8 key attributes of “quality deals.”

  1. Growing revenue streams, (preferably recurring)
  2. Stable, increasing cash flow
  3. Scalable
  4. Non-cyclical products or services
  5. Low CapEx required to achieve growth
  6. An excellent management team
  7. A diverse customer base
  8. A motivated seller

“With corporate valuations at historic highs (in 2018), business sellers operating “quality” businesses tend to have the mindset that they should hold longer,” PEI founder Andy Jones observes. “They delay an exit because cash flows are good, and the company continues to grow.”

But consider this: Delaying an exit may place owners in a flood of Boomers with the same idea. Meanwhile, valuations are currently at historic highs.

Read more here.

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“I retained Business Transition Strategies to handle the sale of my company, which manufactures machined parts for a diversity of sectors. The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home. Their data room system, with a lot of information loaded in advance, saved time during due diligence. I would recommend John Howe, director, and Ken Schaefer, deputy director and the entire BTS team to any private company considering selling.”

- Scott MacDiarmid

MacDiarmid Machine Corporation