Positive news surrounding middle market M&A continues to swell as well as continue into 2023. A recent survey conducted by Citizens Bank revealed a great deal of optimism for middle-market M&A activity this year. Essentially, businesses have remained resilient even during challenging economic times. In addition, interest in M&A deals continues to be a top priority by both middle-market companies and private equity (PE) firms as both buyer and seller pipelines return to pre-covid levels. To summarize, all indications point to 2023 being a great year to consider selling your business. So if you have been hesitantly holding off, it is time to start the conversation.
One reason for optimism is that valuations and company performance outlooks are on the bright side. According to the survey, more than 80% of middle-market businesses and PE firms felt that company valuations would be stable or higher this year when compared to 2022.
M&A to Drive Growth
Nearly two-thirds of respondents report that they are turning to M&A strategies as a primary vehicle to create growth in 2023. And it has been proven that it does tend to be faster and more effective than relying on organic growth. Additionally, this year, the leading motivation that is bringing sellers to market is the lack of a succession plan and a need for new leadership.
It’s a Seller’s Market
This year, both middle-market companies and PE firms say they see an advantage for sellers in the current market. Buyers are seeking growth, so high-performing businesses can have a real edge when going to market. The situation can also benefit sellers by improving economic circumstances and lower interest rates.
Plenty of Buyers and Sellers
Regardless of all the extraneous factors, there is still an overabundance of buyers versus sellers across the middle market M&A landscape. Sure, there is some lingering uncertainty. However, 40% of middle-market businesses surveyed reported that they are currently involved in selling activity or are open to it this year. Meanwhile, 53% of companies said they identify as current or potential buyers. That’s an increase in demand of over 45% from 2022, making it a pretty big reason, further strengthening the case as to why to consider selling in 2023.
What it Means for You
As a business owner, you should also envision yourself as an empowered seller. You want to capitalize on this seller’s market before this historic dynamic shifts, to becomes a buyer’s market. Timing should be at the forefront as sector shifts could bring about opportunities that are truly time-sensitive. Continuing to delay, could cause you to miss out on a golden opportunity. Please contact our M&A experts to help you embark on your M&A journey and ensure you are not missing out and getting the most out of your sale. We look forward to hearing from you and discussing your bright future.
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL:
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.