RIA M&A: Cash Deal Now or Opportunity Later?
After the year we’ve had so far, not many of us would say no to some more stability in our lives. That counts double for the RIA industry. A graying workforce weighs its options for exit plans, and the pressure to compete makes inorganic growth an attractive prospect. After spending hours combing through the terms of dozens of M&A transactions for our annual RIA Deal Room Report, I realized buyers and sellers last year showed a greater hunger than ever for the perceived safety of cash deals.
From 2015 to 2018, cash made up 47% of the average acquisition. Last year, it leaped to 70%, and we expect cash will play a significant role in deals to come. The flight to certainty is real, but is it the whole story? And what does it mean for the future of M&A in our industry?