One out of 10 small and midsize company owners are selling their firms because their children are refusing to take over the family business, preferring a cash inheritance by selling the companies their parents built, a survey showed Tuesday.

According to Korea M&A Exchange, a platform that mediates buyers and sellers of small and medium-sized enterprises, of the 5,481 business owners looking for buyers, 515 said they were looking for new owners to take over their firms as their children did not want to take on the family business. 

By industry, owners from traditional industries such as those in agriculture and manufacturing, were more eager for a sale -- 5.4 times more than those in software -- the survey results showed.

Experts say descendants of small firms would rather inherit financial assets than take over the family business, since they mostly belong to industries seen as declining.

“Descendants aren’t interested in running manufacturing business or others that show little prospect. Adding to that, they would rather accomplish ‘financial independence,’ a state of early retirement, by inheriting money after the company is sold,” said Hwang Se-un, a senior researcher at Korea Capital Market Institute who did not participate in the survey.

An M&A Exchange official forecast that with baby-boomer CEOs retiring, company sellouts will be the new trend in mergers and acquisitions of small firms in the near future.

In Korea, baby boomers refer to those born between 1946 and 1964.

(hyejin@heraldcorp.com)