Source: PitchBook’s Q1 2023 Global M&A Report – *As of March 31, 2023
Small and middle-market businesses that are founder-owned continue to be the bread and butter of the M&A world in 2023. According to PitchBook’s Global M&A report: “In Q1, founder-owned businesses accounted for 85.3% of sellers in M&A deals, an all-time high. These companies are the dominant players in deals below $100 million.” Even large private equity groups that typically close deals in the hundreds of millions will acquire niche sellers now and again, to diversify and strengthen their portfolios. These investors join strategic buyers in bids for small businesses across most steady categories- namely, manufacturing, information technology services, healthcare, distribution, transportation and construction. At some point, most growing companies consider a strategic acquisition in order to stay ahead of the market and weather surprising trends. Why, then, has the median selling price in terms of EBITDA multiples dropped in late 2022 and early 2023 as reported by the most recent DealStats Value Index?