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Wanda Silva, President Silva Capital Solutions, Inc. Marietta, GA
How would you characterize the current state of the PEO M&A Market?
I would characterize the PEO M&A Market as solid yet ever-changing. While we have seen a significant amount of consolidation over the past 12 – 24 months, there is more to come.
Do you anticipate the market changing in 2023?
Yes, I anticipate the market will change some in 2023. There are a lot of moving parts such as inflation, the cost of capital, rising interest rates, supply chain concerns, economic concerns in addition to disruptors worldwide like the Ukrainian war. These components impact M&A in all industries. If you want to sell, 2023 will still be a good time and many buyers/investors still have a lot of “dry powder” to invest in the PEO space.
What do you want someone considering selling in 2023 to know right now?
2023 will still be a good year to sell your PEO. BE READY! Have a detailed business plan that shows a clear path for sustainable/profitable growth. Most importantly, have your company prepared for an exit, much like we see homes being staged to sell. Have a professional team of advisors who help you prepare with a detailed M&A Exit Planning Checklist. Look for buyers who honor your legacy. Sooner is better based on the market, but if it is not pragmatic to sell at this time, keep growing your PEO.
What would you want someone to consider buying in 2023 to know right now?
I would want a buyer to know that there will be continued competition for valuable companies. Do not compete just to get in that game, but instead look for PEOs who are nimble, strong and truly add value to the company YOU have built. Have a clear and cohesive plan for implementation and assimilation.
What is the biggest challenge in the PEO M&A market right now?
I think the biggest challenge is the uncertainty we face on numerous fronts all at the same time. The PEO industry is resilient and we are poised to continue our leadership in the HR outsourcing space. M&A is resilient as well and great companies will always sell for solid value. Constantly monitor all the components of uncertainty but most importantly whether you are a seller or buyer/investor, listen to your heart as it will always tell you which way to go when decisions need to be made.