Have you been contemplating selling your pest control company? If you have, now is one of the best times to take action. As the principal and founder of The Aust Group (TAG), a mergers and acquisitions (M&A) firm that specializes in the pest control industry, I’ve had a front-row seat to some of the most favorable market conditions we’ve ever seen.
When I sold my company, Bug Doctor Termite & Pest Control, in 2016, I felt as though I had won the lottery because of the incredible multiple I received. As I write this in mid-June, multiples are still at historic highs. For owners who have invested years of hard work in building their businesses, this could be a once-in-a-lifetime opportunity to maximize value and secure a strong financial future.
With multiples still in the seller’s favor, we’re witnessing a steady flow of pest control companies exiting. We’ve seen numerous younger sellers in their 30s and 40s cashing in. We’re also seeing previous sellers who have waited it out and honored their noncompete agreements reentering the pest control industry with start-up companies.
So, why is the timing so ideal right now?
1. Higher multiples and buyer demand
Strategic buyers and private equity firms are aggressively acquiring pest control companies because of the industry’s stability, recurring revenue and recession-resilient nature. Pest control businesses are viewed as essential services, making them attractive in both strong and uncertain economic environments.
Pest control companies with strong margins, solid management teams and high recurring customer revenue will receive the highest multiples. With so much competition among buyers, sellers often are able to command premium valuations and favorable deal terms.
2. Favorable economic climate — for now
While market conditions are strong today, that may not always be the case. Interest rates, inflation and geopolitical uncertainty could impact buyer behavior and valuations in the future. No one has a crystal ball to see the future. Business owners who wait too long may miss this golden opportunity. Timing is everything.
Additionally, regulatory and tax changes could alter the landscape. For example, potential increases in capital gains taxes in the future could reduce net proceeds for sellers. Locking in today’s high valuation and current tax structure can be a wise financial strategy. The law of gravity — “what goes up must come down” — is a fitting reminder for today’s market. The high multiples being paid for companies won’t last forever.
3. Succession and lifestyle considerations
Many pest control company owners are approaching retirement age or are ready for a new chapter. Whether your goal is to retire, spend more time with family, or pursue a new venture, selling your company can provide the freedom and liquidity to make that possible.
We also work with owners who want to stay involved post-sale through an earn-out, equity rollover or management role. Today’s buyers are often flexible and willing to structure deals that align with your personal and professional goals.
4. Partnering with the right advisor makes all the difference
Selling a business is one of the most important decisions you’ll ever make. That’s why it’s crucial to partner with an advisor who not only understands the M&A landscape but also knows your industry inside and out. As a founder and former owner of a pest control company myself, I understand the challenges you face, the true value of your business and how to position it for maximum return in today’s competitive market.
If you’ve built a valuable business and want to capitalize on a market that’s working in your favor, now is the time to explore your options. Whether you’re ready to sell now or just beginning to plan ahead, a confidential conversation could help you make an informed and strategic decision.
<p>The post 4 reasons why now is a good time to sell first appeared on Pest Management Professional.</p>
from Pest Management Professional https://www.mypmp.net/4-reasons-why-now-is-a-good-time-to-sell/
Sacramento CA
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