When compared to the second quarter of 2015, data collected in this year’s second quarter reflects an increase in business sales by smaller companies, according to the Market Pulse Report published by the International Business Brokers Association, M&A Source and the Pepperdine Private Capital Market Project.
The report shows that 57% of deals that were executed in the second quarter of 2016 were valued at less than $499,999, up 7 percent from the second quarter of 2015, while the percentage of deals in Q2 2016 that were valued between $5 million and $50 million fell to 11 points to 23%.
Although businesses valued at less than $499,999 remain in a “buyer’s market”, the advantage shits to sellers as deals approach $1 million.
“We’re in the second longest bull run, only behind the bull run of the 1990s leading up to the dot.com crash,” said Scott Bushkie, IBBA Chair, in a recent press release published on BusinessWire. “We have to assume market conditions will shift, but whether that takes place six months or three years from now is anyone’s guess.”
According to report, there was also an increase in Q2 2016 interest from first-time buyers who were foreigners, former corporate executives, or women, which may help explain the increase in smaller deal sizes.
“When someone is not ready to retire, but can’t find the right job, sometimes the best approach is simply to buy a business and create your own perfect job,” Craig Everett, assistant director of the Pepperdine Private Capital Markets Project said in the press release for the report.