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An M&A Guide for the Middle Market

Zach Brooke

A new report from the National Center for the Middle Market singles out mergers and acquisitions as a powerful and even predictable force behind sector success. “Middle Market M&A: What Executives and Advisors Need to Know to Make the Most of Mergers & Acquisitions” uses data from Thompson Reuters to determine that approximately 2,000 middle market deals are struck every quarter. 2017 was no different, despite 60% of middle market companies reporting they perceive an uptick in merger and acquisition activity.

“It feels up, but it’s not,” explains NCMM executive director Thomas Stewart, who points to historical Middle Market Indicator data showing a definite cadence in the transactions. “Those charts are as predictable as a marathon runner’s heartbeat. Just constant rhythm. … What’s different is there is [now] a lot of money out there looking to make deals. That means two things: Price is going up and the structure of the deal has changed a little bit. Less banks, more equity.”

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Regardless of the cyclical evolution, NCMM research shows that 1 in 5 middle market companies makes an acquisition every year, while 1 in 20 sells outright or divests a portion of the company. 

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Zach Brooke is a former AMA staff writer turned freelance journalist. His work has been featured in Chicago magazine, Milwaukee Magazine, A.V. Club and VICE, among others. Follow him on Twitter @Zach_Brooke.