Not every company is the same, but….
Investment bankers, lawyers and other service providers are in the midst of “silly season” – the post-Labor Day rush for advisors to be visible to prospective clients and update folks on the trends in the M&A
market. It is always interesting, and sometimes entertaining, to attend and present at the various breakfasts, lunches and dinners that take place during this part of the year.
It also raises some challenges for business owners and executives in the defense and technology sector, who are inundated with information about the relative value of companies, the steps to take in preparing for a transaction and what to expect during and after the transaction process. While the discussions of market trends and guidance provided by experienced advisors must be general in nature to appeal to the broad audiences at these events, these generalizations can be a problem if they are taken into account in your strategic planning without recognizing that each company situation has a unique context.
Every company – irrespective of size, experience of the management team, etc. – should surround itself with experienced advisors that are willing and incentivized to be transparent and objective about their views on the market and the company. This is especially important in today’s market, with the unprecedented volatility of the economy and capital markets, tight customer budgets and major structural changes are on the horizon for capital gains taxes.
Management teams and shareholders can’t see the entire framework of the market given the focus required to execute on their strategic plans. This is compounded by the fact that strategic plans need more urgent and iterative adjustments to stay in lock-step with the market. We urge you to surround your management team with experienced advisors in all capacities and provide them with an environment in which they are free to provide their best objective advice. And remember, this is a cyclical market where timing is everything!