Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

April 15, 2013

Middle Market Trends

By Joseph Eneldas


As the “spring market” starts arriving in the North-East US, supported by an improving transaction market, we wanted to give our readers insight into a few current trends and research reports for “Main Street USA”.

A recent study conducted by the IBBA (international Business Broker Association) and M&A Source identified two key reasons for selling by owners of businesses valued between $500k to $50MM:  (a) retirement of baby boomers, and (b) burnout or family reasons.

The first reason is somewhat intuitive given that the first boomers are now 67 years old, entering “prime age” for selling their business. The gradual shift in demographics will accelerate such trend – with the implicit notion that successful business sellers in this group need to be better prepared with a more sophisticated market campaign to sell their business in an ever more competitive market.

However, the second reason – burnout – is a reflection of the significant recession that started in 2009: many boomers would have sold earlier, however, they were side tracked and held on to to their businesses much longer than planned – in the hopes that “next year would be better”.

“This observation is completely consistent with our experience in all our seven offices across the region”, says Achim Neumann, President, A Neumann & Associates, New Jersey.  “At no time in the history of our firm have we dealt with so many soon to be retirees who have apparently held on to their business for much too long”

As a matter of fact, for businesses in the $2MM to $5MM range, it takes between eight months to two years to close a deal – although in many instances, A Neumann & Associates has been closing considerably faster in the past two years.

“Nevertheless, companies in the lower middle market really need to be proactive in their planning,” said Kevin Dempsey, principal of Summa Financial Group and chairman of the M&A Source. “Burnout and family issues are leading reasons these owners sell, but when it takes a year or more to sell a company, you don’t want to be reacting to negative triggers—especially as buyers put the most value on your last 12 months of business performance.”

Thus, good mid-term planning and forecasting will be a key driver to enable a business owner to make a smooth transition.

Another interesting trend in said research relates to the typical ‘buyer profile’ – something our firm is consistently questioned about by prospective sellers. It is mostly companies or individuals (as opposed to private equity groups or competitors) that are looking to acquire, whereas for companies under $1M value, individuals are mostly seeking to “buy themselves a job”. Interestingly, often idle cash is used for acquisitions as opposed to lender funds in highly leveraged transactions.

Finally, with many deals never making it to the closing table, one might question the reasoning for such: the #1 reason for deal termination is unrealistic expectations on either buy or sell side, followed by a lack of buyer preparation, followed by poor seller preparation. Combined, the three factors account for 65% of all deal terminations.


Business owners need to plan well ahead in an always increasing competitive “business-for-sale” market, requiring more thorough preparation starting from proper documentation, to financial analysis, to third party valuations, to sophisticated prospectus preparation in order to succeed. Failing to do so will leave a business owner in a space that was recently described by the SBA as “80% of all privately held businesses will never be sold due to lack of proper preparation”.

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About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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