Now is a Great Time to Buy a Business

With reduced consumer and corporate spending, there is little doubt the current economic situation has affected many businesses in quite a few industries. Many have been affected substantially and have financial difficulty and some don’t have enough working capital to continue business . For this reason, now may a great time for some of you to acquire a synergistic business that you can get for a great deal and possibly increase your net margin through some following examples:

• Buy a manufacturer, distributor of a product or a provider of a service that can be sold by your same sales people
• Buy the goodwill of a manufacturer of a product you can make in your same plant
• Buy a service provider or product manufacturer/distributor whose service or product can be packaged with yours
• If your business is seasonal, buy a business that flourishes in the opposite seasons to yours
• Buy a business for its customer base, supply chain, process, or intellectual property that can help you sell your existing products or services or reduce COGS or overhead

Even if you don’t buy a synergy company, you may want to consider buying a company if any of the below are true about your existing company:

• If you and your management have the time, ability and capital, a turnaround may be a good opportunity for you
• If you are looking for a long-term investment on a discounted company
• f your company has hit maturity and you need to diversify, buying a company now may be the best way to go about doing this.

Also remember that many experts expect that about 80% of closely-held businesses will be for sale within the next 10 years, so keep your eye out for the best opportunities at all times. In regards to timing, if you believe that company financials will be lower 6 months to a year from now, start looking now because it does take time to find the right company, complete due diligence and close.

Even though banks are less willing to lend right now, it is still possible to get acquisition financing if you have a strong relationship with your commercial bank, a strong balance sheet, or if you have access to mezzanine lenders. Currently, financing may be at higher rates and lower debt ratios, but if you or your company can afford to invest some cash or endure some cash hardship for a short time, buying another company can be a great investment for your existing company. Once credit markets return, profits from the acquisition are likely to be higher, effective interest rates may decrease and you will be able to probably leverage more of the business on cash flow.

We know that some of you may have experience in buying or selling a business in the past, but buying a business in today’s market can be tricky and you want to be able to get the best deal possible. Whether you are interested in our representing you or you are just inquiring as to what may be available in your industry, please contact us and we would be more than happy to discuss your needs. In addition, our network of banks and mezzanine lenders makes it possible for us to help find financing for your transaction.

Contact us at info@orioncg.com or visit our website at www.orioncg.com.