The Global M&A Forum is appealing to companies because of its focus on the midmarket, said Mueller. The 60 buyers coming to the table are squarely focused on midmarket solution provider/managed service providers, he said.
As for the 30 sellers seeking equity or an exit, up from only 14 at the year-ago Global IT M&A Forum, Mueller said the new crop of sellers is of a "higher quality" with many looking to land growth capital rather than an exit strategy. "A lot of these companies are looking for a spike; they might want to raise $5 [million] to $10 million of growth capital so they can make some acquisitions," he said.
The sellers include a wide range of cloud services, SaaS, systems integrators and managed services companies from a 30-year-old infrastructure-focused system integrator with nearly $100 million in sales to a nine-year old IT services provider with a full set of outsourced managed services.
The cloud computing services market has many companies in the $5 million to $20 million segment looking for a deal, said Mueller. "It's hard to land big enterprise clients as a company of that size where a lot of the major recurring revenue is," he said. "If they are interested in landing large enterprise business, they are much better off in the ecosystem of a much larger strategic buyer.
"There is an old saying we have: Money is a proxy for time, and time is a proxy for opportunity," said Mueller. "If you have access to that capital, you then have access to much more opportunity. A lot of companies are doing the right thing but don't always have the growth capital to get to the next step."
One seller is going to spend half the day seeking private equity growth capital and the second half of the day looking at acquisition targets, said Mueller. "He is wearing the hat of a seller to raise capital and the hat of a buyer to look at potential acquisition targets with the money he hopes to raise at the forum," he said. "People are being very creative on how they use this forum. We have the right format, and we think the right buyers and right sellers are all coming together for 24 hours next week at the forum. It should be fun.
PUBLISHED OCT. 31, 2013