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What To Expect For Middle-market Company Valuations In 2023

Posted on March 13, 2023 By

2023 holds a positive outlook for middle-market business valuations. Results of the survey, 2023 M&A Outlook from Citizens M&A Advisory show good signs for company performance and high motivation for growth this year. The annual survey polls 400 leaders of US middle-market companies with $50 million to $1 billion in revenue and private equity firms actively buying and selling companies in the same revenue range.

The survey showed buyer and seller sentiment regarding M&A is expected to return to pre-pandemic levels as conditions stabilize and companies become more resilient and financially sound. So this year, we can expect both buyers and sellers to be eager to return to the market. And it’s good news for valuations. More than 80% of US companies and PE firms agreed that valuations this year would be stable or higher than last year. 

And the excellent news is that middle-market companies and PE firms concur that the market favors sellers. This indicates that this year is a great time to sell your business. Buyers are eyeing growth, and if you’re company is doing well, you will have an advantage.

Regarding expectations for deal flow, around 34% said they expect increased volumes in 2023. For impetus for deal flow, half of these firms cited an increase in PE-backed assets coming to market, and a third cited improving economic conditions and lower interest rates.

Additionally, 40% of middle-market companies reported being currently involved in selling activity or open to considering it this year, and 53% said they are current or potential buyers.

There is also a higher demand for advisor expertise on M&A deals in 2023. More sellers and buyers are looking for an M&A advisor for expert guidance. As with previous years, the most-reported reason for seeking an M&A advisor is to help achieve the best deal value.

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Companies still do take note that there are still economic headwinds, as more than 60% reported that inflation and interest rates are making business operations more challenging. Also on the list of concerns are labor shortages, commodity prices, and geopolitical factors. Even so, companies are adapting, with 84% deferring their cost increases to customers. Most businesses remain optimistic for this year, and M&A is expected to be a key growth and value driver for them.

Middle-market company buyers plan to acquire companies to achieve growth. In fact, 62% named growth as their primary M&A motivation versus 48% last year. Sellers are also focusing on growth, with 35% reporting they plan to sell for strategic growth opportunities. There is also a strong motivation for sellers to turn to M&A because they lack a succession plan and need new leadership.

By sector, outlooks for 2023 varied, but higher valuations are expected across the board except for transportation & logistics. The sectors with the most confident forecasts are aerospace & defense, and business services. Healthcare remained in line with the optimism of last year.

Citizens Financial Group, Inc, conducted the survey. The core business sectors included in the survey included aerospace & defense, government services, business services, consumer, gaming, lodging & commercial real estate, healthcare, technology, media & telecom, transportation & logistics.

If you are considering selling your company, 2023 is the time to act. Please contact our M&A experts at Benchmark International to discuss how we can help you achieve the best deal possible.

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Africa: Anthony McCardle at +27 21 300 2055 / 


Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $9.4 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.





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