Business owners who want to sell their companies are scurrying to get them sold before the end of the year because of potentially higher tax rates in 2013.
Broker Roberta Caputo expects to close a $1.2 million sale of a South Florida trucking business on Dec. 31, in the nick of time for the transaction to count for the year.
"We will have an incredibly strong finish to this year," said Caputo of Capital Business Solutions in Deerfield Beach, who said there are "several million dollars" worth of sales pending before year end.
South Florida companies recently listed online at bizbuysell.com include an insurance firm, check-cashing store, car wash, and several restaurants, child care centers and gas stations. Usually, business owners decide to sell for personal reasons but this year, fiscal-cliff negotiations between Democrats and Republicans -- and what that outcome might mean for tax rates -- is spurring more selling activity.
"They're afraid that capital gains are going to go from 15 percent to 23 percent," said Andrew Cagnetta, chief executive of Transworld Business Advisors, a business brokerage in West Palm Beach.
Cagnetta said business owners generally decide to sell their companies because of "life-changing" events: they want to retire, they're getting divorced, having health problems, or they're "just tired and burned out."
"There have been some people going into the marketplace that have been holding on for four years. 'Now I really want to retire,' " he said. While they may not get their optimum price, they figure they'll get more than they would have a few years ago during the recession.
For both health and tax reasons, "my wife and I decided now was a good time to get out of the business," said the 65-year-old Alan Gould, who last week sold his West Palm Beach tax firm that carries his name to KPS & Company, a Connecticut firm.
"We'll stay around two or three years to help the transition," said Gould, who started the firm nearly 23 years ago.
In Boca Raton, Sheldon Kalnitsky said he needs a major investor to promote his product, a "wave shield" designed to reduce radiation in the ear from use of cell phones and cordless phones. So he's decided to put up the 12-year-old business, Interact Communications, for sale.
"I want to make everyone aware of the health risk," said Kalnitsky, who hopes to sell the business for "several million," based on the company's $240,000 in annual sales and its potential to reach a market of millions of cell phone users.
More foreigners are buying businesses, often to diversify their investments or to obtain an EB-5 visa. To qualify for a visa, the foreign investor has to invest a "substantive" amount of money, usually more than $100,000, and employ people filing wage and tax statements with the government.
Transworld Business Advisors has sold businesses to investors from Colombia, England, Canada and Europe. "It's people who like South Florida," Cagnetta said.
Caputo said buyers generally look for profitable businesses that have been able to withstand the economic variables in a tough economy..
"We've been seeing a lot less tire kickers and a lot more serious prospects, which is refreshing," she said.
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