For more than a century, dramatic surges in M&A activity have come and gone.
There are several principle factors that contribute to these changes, such as, economic outlook, financing alternatives, credit markets, price expectations, strategic opportunities and sector challenges.
History has proven that lower middle and mid-market activity has been the precursor to larger market optimism.
Today and for the next ten years it is estimated that there will be more money devoted to acquiring these businesses than ever before in history. Privately held business owners with planned exit strategies are going to be the primary benefactor of this activity as the trend towards quality is expected to continue.
Standalone lower middle and mid-market companies offer considerable synergistic opportunities for potential acquirers, with conditions remaining favorable for increased deal making in the future.
Strategic buyers continue to sit on large cash reserves waiting for the right circumstances to acquire, and private equity is under pressure to do deals given the industry is sitting on over $350 billion of investment capital.
With experience spanning six decades, VR is proud to specialize in the lower middle and mid-market. Many are surprised to learn that the lower middle market has accounted for 55% of the middle market deal flow for 2022 and 2023. This represents a dramatic increase of 41% from 2021. The credit crunch had a lesser impact on the lower middle market compared to the broader market, as smaller deals often require less leverage.
At VR, we have found that deal-making in the lower middle and mid-market is roughly evenly distributed across industries. This allows our wide range of expertise to serve clients in many areas.
Another trend developing is the acceleration of fundraising for lower middle-market investments. With funds showing increased awareness of this segment of the market, the future should be conducive with even more deal-making.
The value proposition VR brings to its clients, is helping to identify the window of opportunity in which to acquire or sell a business at a desired price. Our services address whether the overall market for buying or selling a company is favorable?
How will a company’s recent performance affect price? Are our clients emotionally and financially ready to enter or exit a company?
With a heritage unchallenged in the privately held lower middle and mid-market. VR looks forward to working together on your next “big deal”.
Are you ready to learn more?
History has proven that mid-market activity has been the precursor to larger market optimism.