At Mentor Securities, we are provided access to many potential deals from professional advisors. Is there any difference in what we have seen in 2016 versus the last 2 to 3 years?
Following is a summation of what's new:
- More early stage/startups seeking equity capital.
- A small surge in potential transactions for medical devices.
- Sellers are more cautious about "opening the kimono" too quickly to somewhat aggressive buyers.
- Continued reluctance from companies seeking capital to pay upfront advisory fees (retainers). IBanks are seen more as finders than grinders, as if the process of going to market is not necessary and we bankers can pull investors off a shelf to plug into different deals.
- Seller multiples are similar to 2015, if not slightly up for healthcare, computer services, and internet media firms.
- Banks claim they will lend into deals, but often cannot close (underwriting rejects the package) or fall short on the senior debt required.
- There is no shortage of minority equity funding sources, but most investor/buyers prefer a control transaction.