AMCs are navigating considerable headwinds these days. With fast changing technology, rising client expectations, stricter regulations, and downward pressure on margins, the future is by no means certain. Inevitably, some AMCs will succeed and grow, while others are imperiled.

We at Turk and Co are seeing a lot of confused AMC owners these days. Smaller ones know that the big guys are very well able to stay up to date with the latest trends (and in some cases shape those trends) and invest more in the technology which lenders value. Data Security worries everyone, and the larger AMCs are better positioned to invest in strong cybersecurity measures that safeguard sensitive client information. Many local and regional players are wondering how they can compete with the larger national players in the face of all these challenges.

Everyone knows that consolidation is very real. It is likely that the number of local and regional AMC firms will shrink, and we will be left with a very different marketplace of larger, more established national firms.

For these reasons (and more), many local or regional AMC owners have turned their attention to an exit plan. A M&A transaction is one way to exit, but there is concern that business valuations today are lower due to the recent economic downturn. The challenge here is that it could take years of proven higher earnings (EBITDA) for the market to recognize an improved value. No one is going to pay only on projections. Holding on until the economic cycle corrects itself may not be feasible for everyone.

Not all AMC owners are individuals approaching retirement. Younger ones know that there is a dearth of good leaders. For them, merging with or selling to a larger AMC also represents potential career growth, while derisking and taking some chips off the table. Having a pile of money in the bank from sale proceeds is a great way to make sure you sleep well at night.

Succession planning is critical. With strong headwinds and the fatiguing waves of uncertainty, we see many accelerating the plan for ‘what is next’ for the business they founded or grew. This is a big deal and worth strategically planning. We can help.

At the same time, there are other firms – mostly larger – who are sitting on cash right now and have the patience and fortitude to play the long game. They will win. We’ve been cultivating relationships with them (especially those who are major investors) for years. They are buying market share and will absolutely reap the benefits of their patience in the long run. Our (proprietary) list of qualified buyers has never been as substantial as it is now.

The concern that sellers have about reaping the rewards for their perseverance in surviving the downturn and participating in the inevitable market growth is fair. We’ve worked with a lot of sellers in this position and have some very innovative and creative fresh deal structure methods (beyond the usual earn outs) which address this. We’ve implemented our unique approach, and it works. Turk and Co is your top resource to guide you through all this uncertainty.

Our perspective is shaped by our extensive experience. Turk & Co is a FINRA registered and SEC compliant Investment Bank focusing on M&A transactions in the settlement services and real estate space. We’ve closed more transactions of settlement service businesses (title agencies, businesses ancillary to settlement services, title underwriters and AMCs) than any other Investment Bank in the country. We see things others don’t, and this unmatched track record gives us unique insight which benefits both our buyer and seller clients.

One of the best ways to overcome confusion is to seek clarity – that’s where we come in. Whether you are interested in buying or selling, we can help navigate your future direction. For answers or support please reach out to us at , or call 310 294 9199.

-Howard Turk