Private Company Seller Perspectives in Lower Middle Market M&A

Background: There is abundance of research that suggests middle market organizations operating in most countries play a major part in contributing to GDP growth attracting revenues for governments and generating jobs for the labor force. Evidence also shows that when middle-sized organizations compete, it often results in a catalyzing effect triggering innovation and the development of new products and services. At some point during the business cycle, owners are likely to seek to understand the value of their investment and company from the perspective of the market and potential buyers. The rationale for this research was to address the seller/buyer experience from early transaction process through deal closing, as often this is portrayed in literature as an overly simplified journey as just identifying buyers likely to pay the most and negotiating the terms to maximize the sale. The authors address the gap in the literature that would suggest this is not usually the case.

Methods: This study was conducted from 2013 to 2022 with 130 questionnaire responses from individuals who have undergone and completed the selling process.

Results: This study showed a range of predictor variables from economic buoyancy (timing) and retirement as motivations to sell as with the literature with some nuanced differences. The authors also found differences between the actors who consult and guide the selling process.