M&A Update – Strategic Buyers and PE Firms Stay Aggressive in 2025
What’s Driving M&A in 2025? A Mid-Year Outlook
Despite economic uncertainties and tighter lending environments, deal flow in the small and lower middle market remains strong—especially for companies with recurring revenue, niche market positions, and solid management teams.
Key acquisition trends we’re seeing in Q2:
- Private equity firms are moving faster: With dry powder at record levels, many firms are targeting add-ons and founder-led businesses where they can unlock operational efficiencies.
- Strategic buyers are paying premiums: Companies looking to vertically integrate or expand geographic reach are still aggressive on valuation.
- Seller activity is increasing: Many owners who delayed exiting during the pandemic are now re-engaging with advisors to plan their transition.
For business owners, it’s a reminder that the M&A market continues to reward preparation. A confidential conversation with an experienced advisor can help you capitalize on favorable market conditions before they shift.
What Is Your Business Really Worth? A Guide for Small and Lower Middle Market Owners
Valuation Isn’t Just About the Numbers
Many business owners assume a multiple of revenue or profit tells the whole story—but business valuation is more nuanced than that. Whether you’re planning an exit or just want a clearer picture of where you stand, here are the key factors that influence your company's value:
- Cash Flow Quality – Strong, predictable cash flow (measured as SDE or EBITDA) drives higher valuations.
- Industry Trends – Buyers are paying premiums in sectors like healthcare services, technology, industrial services, and outdoor equipment.
- Owner Involvement – Businesses with strong management teams and minimal day-to-day reliance on the owner trade at higher multiples.
- Customer Concentration – A diversified customer base reduces risk and increases value.
- Growth Opportunities – Buyers look for businesses they can grow—either through marketing, geography, or added services.
Whether you're looking to sell this year or five years down the road, getting a valuation now helps you plan smarter and increase the value of your business when the time comes.
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