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V O L . X X I N O. V I I I A P R I L 2 0 , 2 0 1 5 28 company in our marketplace in Maine and New England," he says. "It's taken a long time for people to get to the place where they're willing to say 'I'm in a growth mode' or 'I'm willing to buy a business.' ere's a sense of solid- ity in the economy now, a feeling that growth is possible and sustainable. at's incredibly important." CFA's niche is the "middle market," which Wall Street defines as anything less than $1 billion, but which Adams says in a small, largely rural state such as Maine is typically below $50 million. By far, Adams says, the greatest number of companies for sale that he sees in Maine are in the "few million up to $50 million range." Adams bases his sense of Maine's mergers and acquisitions activity on CFA's Portland office being "signifi- cantly busier now than a year ago," with half of the business being in financ- ings and half being in mergers and acquisitions. "Our deal flow increased 15% between 2012 and 2013, and 30% between 2013 and 2014," he says. "is trend continued in the first quarter and we expect 2015 to be a very robust year." Giving credence to his assess- ment is a bullish forecast for 2015 by PricewaterhouseCoopers, which reports 9,354 transactions in the United States through October 2014, representing $1.7 trillion in disclosed deal value. It was the highest M&A value recorded since 2007's record $1.8 trillion, PwC reports, adding that it expects that "momentum to continue in 2015." Other positive indicators include: e quarterly Duke University/ CFO Magazine Global Business Outlook Survey, released in March, which reported that on a scale from 0 to 100, 1,000 U.S. CFOs rate the economic outlook at 65, the most optimistic expectation for the U.S. economy since 2007. Market Pulse, a quarterly survey complied by the International Business Brokers Association, M&A Source and the Pepperdine Private Capital Markets Project, reports deal volume increased in the last quarter of 2014 and that 89% of the 200 business brokers and advisers surveyed expect M&A activity to increase this year. "It is possible that for the first time since early 2007, the market has some pull to it," private equity analyst GF Data concludes in its February 2015 M&A report. "at is, more business owners are beginning to feel that the current mix of economic, industry and capital market conditions will not last forever, and that these conditions are becoming an impetus to sell." Time to sell? Adams brings to his role as a CFA adviser a broad perspective, reflecting his diverse background as a busi- ness owner, investor, legal adviser and legislative advocate. What's signifi- cant about the recovery happening in Maine and elsewhere, he says, is the "meaningful confluence of better valu- ations for small- and medium-sized businesses [largely due to increasing sales revenues]; demographic factors [older owners who now are think- ing about selling]; and a lower cost of capital for buyers who may need to borrow as part of an acquisition." Even so, he stops short of making sweeping generalizations that now is the best time for any would-be seller to pull the trigger and put his or her company on the market. ere are other factors besides the generally favorable macro-economic condi- tions, he says, including the size of the business; its total enterprise value (or TEV, which factors in debt and is considered a better reflection of the market value of business than simply its net worth); and earnings before interest, taxes, depreciation and amor- tization (or EBITDA, a measurement of the business's free cash). Sam Adams, director at Corporate Finance Associates, in the Old Port in Portland. P H O T O / T I M G R E E N WAY Selling the family business A Portland investment banker sees an uptick in M&A activity B y J a m e s M c C a r t h y F O C U S » C O N T I N U E D F R O M C O V E R

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