2010 market dynamics. Sort of like Christmas future, it could be or it could not.
2010 Money – OPM is the mother’s milk for acquisitions. Banks held on to money in 2009. Money was not released to the private sector. Interest rates remained low. Money will soon be released, as banks will finally be pressured by congress and what will at first be fueled by slightly increased interest rates. If you qualify to borrow money get in early, as rates are still attractive. Be friends with your banker as they should be impressed. Share those P&Ls, growth stories and balance sheets
2010 Buyers – As many of you had the cash and wanted to do deals in 2009. More of you will in 2010. You still have the cash and in some cases will borrow money for that precise reason. You are in one of the only truly international industries without state lines, you see this as a benefit, you can spread your risk. You want and will do more deals in 2010. Either expand where you have the opportunity to gain wealth or pay taxes. I know your choice.
2010 Sellers – After reading the above you are thinking that values will go up right? This may sound self-serving but it may be better earlier in the year than later. Sort of get in while the dynamics are in your favor. At the end of 2010 I (not 20101) would not be surprised to say that the market was “a tad up – to flat”. But as I said before flat is not necessarily bad, but earlier is better. There will be more of you considering selling in the later part of the year that will keep values in check.
2010 Taxes. Up. However for buyers that is one the reasons you like acquisitions, writing up assets provides you with growth capital funded by the government. Yes you pay less taxes as you grow. Never pay taxes until you have to unless rates are to go up…now that could be problematic. For the seller future taxes are a major uncertainty and will be another reason to consider an exit strategy. Sometimes it is good to know the rules.
I for one intend to stay busy. The wait is over.
Happy New Year Tom
More about Tom: NCC – the Hosting Business Broker Twitter: – TomNCC and WebHostBusiness
About Tom Millitzer
I am an M&A guy. I sell Hosting Companies. I want you to fulfill your dreams. If you are building your company or exiting for success...I want help you grow rich.
I started NCC International in 1994, we represented our first hosting company in 1997. NCC has completed over 400 assignments. If you are considering buying or selling you need to know me. I do not bite.
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