What’s a Lower Middle Market Business?
For our purposes a “lower middle-market” business is one that has grown beyond a single location or generates between $2 and $30 million in revenue per year. These businesses can be product or service based and generally have a unique and defensible market position.
Well-positioned middle-market companies are in demand from strategic buyers, high net worth investors, and private equity groups. Transaction structure becomes more complex with these sorts of deals. Buyers attempt to keep stable cash flows while allowing a seller to receive a cash payout, a controlled transition, and potentially a retained interest in the company.