M&A is back…for Companies in the ‘Sweet Spot’

By Mark Roberts, CEO, TechServe Alliance

The appetite for M&A is back. After a relatively quiet 2023 attributable to the industry and market chill, we are seeing a significant uptick in buyer activity. Interest is particularly strong for firms that fall within the “Sweet Spot” — consistent growth, good margins, good team, in a good market, and of a size that moderates risk but appeals to a wide range of would-be acquirers. Because these firms often don’t require a buyer to take on much, if any debt, the elevated interest rate environment is not a hindrance to these types of deals.

We are seeing both sellers who have opted for a broad outreach effort leveraging our more than 100 registered buyers in TechServe’s M&A Marketplace program as well as those who prefer a quieter approach to ‘talking’ with a few select buyers. As an example of current market dynamics, one of the sellers squarely in the “sweet spot,” has received dozens of expressions of interest resulting in multiple offers (LOIs).

I anticipate we will continue to see elevated levels of M&A activity for these types of companies throughout 2024. In addition to representing a renewed opportunity for those owners who missed the 2021/2022 selling window, coming tax law changes are likely to be an additional motivating factor for sellers contemplating an exit.

To learn more about the TechServe M&A Marketplace, please click here.

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