Hart Marx Advisors Featured in Heavy Duty Trucking
HMA’s Senior Partner Tom Marx was recently featured in an article about the evolving 2020 M&A markets within the trucking and commercial vehicle industries. Read our take on the evolving trends and changes.
Regardless of who is doing the acquiring, Marx predicts, “financing is likely going to be more expensive and more risky, which means multiples will come down to reflect the risk.” (Transaction multiples are a type of financial metrics used to value a company.)
Marx believes acquisition contracts will have more holdbacks written in. “If your revenue or earnings doesn’t come out to be what you say… they will hold back more of that purchase price to protect themselves in the event that your business is not doing as well as you claim.”
That may be the deciding factor in whether a deal occurs or not. “If [the seller] is willing to put more of that money on the back end in the future, they will have a better chance of selling the business than if they say, ‘I need an all-cash deal,’ … in which case buyers are going to look at them and go, ‘Why would I buy you?’” he says.
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