Wilmington Trust's Weese says pandemic memories are pulling owners to sell

Marguerite Weese keeps hearing a version of the same sentence from the owners she talks to—businesses that came through the pandemic are back where their owners believe they belong, and the owners are ready to be done—and it arrives earlier than the plans she would have written for them. Weese, who works with business owners at Wilmington Trust, the wealth management arm of M&T Bank, told InvestmentNews that the exit conversation is coming sooner than she expected, and the reason she gives is memory.

The stretch the owners are remembering was, by any accounting, worth remembering: the deepest downturn in the U.S. economy since the Great Depression, an unemployment surge, and the highest recorded single-quarter decline in real GDP, according to U.S. government data cited by InvestmentNews. Research released in 2020 by economists David Cutler and Larry Summers put the total cost at more than $16 trillion, roughly 90 percent of America's annual GDP, while a 2022 Institute for Progress analysis put the range at $10 trillion to $22 trillion. Six years later, the owners who carried their companies through that period are the ones deciding what to do with them next.

What Weese describes is a decision with two engines: one is a number—an offer or valuation that restores what the owner believes the pandemic took—and the other is fatigue, the suspicion that the next disruption is a matter of when. She says the conversations begin either because someone was approached with a figure or because the owner is simply tired, wants the business back where it should be, and then wants out. Succession supplies a third push, since children and grandchildren are not always willing to take the company over, and Weese points to heirs who watched the pressures their parents absorbed and do not want to deal with those pressures themselves.

Wilmington Trust manages about $84 billion in active assets inside M&T Bank, so the conversations Weese describes come out of a substantial client base—though they remain one practitioner's reading of the owners in front of her.

Willingness to sell and readiness to sell are separate problems, and the second is where the current market will send its bill. Research released by BNY Wealth earlier this month, as InvestmentNews reported, found that while private business owners are seeing a receptive deal market, just under 50 percent of sellers are either somewhat or very well prepared when buyers begin reviewing the deal—which means just over half arrive at that review short of the bar.

That shortfall is where the wealth-management M&A conversation is turning: the premium in these transactions has moved from assets under management to operating capacity and seller readiness. Clean financials, a management team that can run the company without the founder, contracts and customer relationships that survive diligence—this is the work that takes years, and it is the part of an exit an advisor can actually supervise. A pandemic memory can start a sale; it cannot carry one through diligence.

Our own reporting keeps running into the same handoff problem: in the September account of the succession Carson agreed to buy in Wauwatosa, eight interviews and a three-person handoff said more about the retirement wave than the $145 million book did. The estate side of that story has its own gap: only about a quarter of American adults have a will, and many of the plans that exist are out of date. Where the next generation is not taking the business, the plan is a sale, and the documents that direct the proceeds need to be in place long before a buyer appears.

For an advisory firm, the practical consequence is a scheduling problem, because an owner who takes a buyer's call in the spring is a client who needs recast financials, a management layer, and a tax plan in place before the term sheet shows up. The sale of a client's company turns an operating business into cash and the cash into a portfolio and a set of tax elections, most of it inside a single year. The advisor who learns about the decision after the investment banker has been hired is working on someone else's calendar.

The number to watch is conversion: Weese's conversations are a pipeline, and what matters is how many of them end in a signed transaction rather than in a valuation the owner keeps in a drawer. The companion figure sits in the BNY research: whether the share of sellers who reach the buyer's review prepared moves at all over the next few quarters. Between those two numbers is the advisory opportunity—owners who mean it, and books not yet in shape to be sold.