One company, however, has built a rock-solid group specifically empowering the small-to-mid-size business professional. Today, the Alliance of Merger and Acquisition Advisors (AM&AA) is blazing a new trail, and it is one that may mean all the difference to America's economic success or failure.
The Alliance of Mergers and Acquisition Alliance (AM&AA) is the leading association and credentialing body for 870 + middle market M&A professionals in 18 countries. Essentially they provide certification, education and other transaction support to Mergers and Acquisition professionals who primarily deal with middle markets—companies ranging from $5 to $500 million in transaction value. M&A professionals are different from business valuation experts. M&A’s are experts at real market valuation, while the traditional valuation experts only work in theoretical values.
“The middle market sector is very large and extremely fragmented,” says Michael Nall, Founder and CEO of AM&AA. “We help M&A professionals to earn and learn together. It’s a community of practice among independents for skills that aren’t taught in business school. M & A really centers around public to public transactions, and with growing interest in private companies, there’s an extraordinary appetite for training and resources in this overlooked sector. A great deal of market research, including reports from Pepperdine and the Edward Lowe Foundation, conclude that America’s best future is with this under-served, overlooked large middle market. And of course, it’s not just in U.S.,” says Nall. “When you look at middle markets in Germany and other interests around the world, there’s a lot of middle market interest everywhere.”
In the 1950s, investors believed that if a company was successful, it would go public. “Now with the emergence of private equity as an asset class, and the large number of baby boomers that own these private companies who need to form some transition and succession plan, there really is a chaotic sort of state out there because most of the 300,000 U.S. private companies with valuations of $5-500 million don’t know what their business is worth. This is where AM&AA comes in,” says Nall. Additionally, Nall says that minority companies are a growth sector in the M&A middle markets, representing over a trillion dollars in revenue, and they are hungry for AM&AA’s services as well.
AM&AA doesn’t take on any projects themselves. Their members, (CPAs, bankers, attorneys), select projects based on one factor: Durability. “If it’s a marketable project and can be successfully completed, our members take it on,” says Nall. “We’ve found that 90% of companies aren’t ready for M&A, and those that think they are, inevitably fail…2/3rds is the current statistic. Our members help businesses improve profitability, build up management teams and fine-tune business processes to increase value.”
Congress has recently defined an emerging growth company (middle market) as a company with sales up to a billion. “We’re really focused on the lower markets,” says Nall. “We’re thrilled with what Congress has done with the new Jobs Act. It has jump started our countries business startups, provided easier access to capital, and has made it an easier ‘IPO on-ramp’ for private companies. Everyone in Washington sees that the country’s economic prosperity really relies on the success of the middle market sector, and that’s why they’ve bumped up the category to a billion from 500-million.” Nall adds that during the economic downturn, companies were being sold at inflated multiples to earnings, and are just now, slowly getting back to strong revenues and profitability.
For more information, please visit: www.amaaonline.com
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