January 22, 2020 Importance of Transitional Planning

National Center for the Middle Market (NCMM)

COLUMBUS, OH — New research from the National Center for the Middle Market (NCMM) finds that more than three-quarters of middle market businesses have either experienced a major transition in the past five years or expect one in the next five years. Far from being unusual, major transitions are business as usual: More than half (54 percent) experienced and expect to experience major transitions, often more than once in a given five-year period. Transitions studied included acquisitions, CEO succession, being acquired or taking on transformational new investment, and restructuring.

Preparing for Major Business Transition, a special report by the NCMM shows that the more companies prepare for transitions, the better results they get. While the vast majority — more than 90 percent — of well-prepared companies say their transitions were successful, only a third of less-well-prepared companies say the same. The study also reveals the importance of assembling a team of trusted advisors to help executives chart a path through transition.

“With baby boomers nearing retirement, an influx of private-equity funding, low interest rates and high valuations, we’re seeing a perfect storm of factors lining up for increased transitions in the near future,” said NCMM Executive Director Thomas A. Stewart. “If these companies prepare for their coming transitions, their results can lead to strong positive outcomes.”

The report, based on results of a survey conducted by NCMM in collaboration with SunTrust Banks (now Truist) and Chubb, polled 404 middle market leaders with active responsibility for strategic decision making. The survey was fielded in November 2019.

“Middle market companies have much to gain from a comprehensive approach to transition planning,” said NCMM Managing Director Doug Farren. “By learning from our key insights, including the importance of trusted advisors and the keys to succession planning, executives can set their companies up for success now and into the future.”

About the National Center for the Middle Market (NCMM)
The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business and Chubb. It exists for a single purpose: to ensure that the vitality and robustness of Middle Market companies are fully realized as fundamental to our nation’s economic outlook and prosperity. The Center is the leading source of knowledge, leadership, and innovative research on the middle market economy, providing critical data analysis, insights, and perspectives for companies, policymakers and other key stakeholders to help accelerate growth, increase competitiveness and create jobs in this sector.

Housed at The Ohio State University Fisher College of Business, the National Center for the Middle Market is the first center of its kind in the nation. The Center enthusiastically serves middle market firms, students, academic researchers, policy makers, the media and other key stakeholders with interests in the health and well-being of the middle market. The Center is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies, and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator. www.middlemarketcenter.org

About Truist
Truist Financial Corporation (NYSE: TFC) is a purpose-driven company dedicated to building a better future for its clients, teammates and communities. With 275 years of combined BB&T and SunTrust history, Truist is one of the nation’s largest financial services holding companies offering a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending and wealth management. Headquartered in Charlotte, North Carolina, Truist serves approximately 10 million households with leading market share in many high-growth markets in the country. www.truist.com

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