While much of the news regarding mergers and acquisitions has involved so called “mega mergers” with companies worth billions of dollars, we would be remiss if we ignored the swath of middle market mergers that have occurred in 2015. According to a number of economists, the middle market, which accounts for companies that are worth between $5 million and $500 million accounts for nearly 70 percent of everything that is important to the U.S. economy.
This would include 70 percent of employment as well as private wealth. In fact, the positioning that middle market companies have in the economy make them unique targets for both large businesses and other middle market businesses. Given this positioning, it is expected that middle market transactions continues to be strong despite the market softening from its torrid 2014 pace. Simply put, the interest continues to be strong.
Indeed, the overall market was at record pace this year because of the largest mergers we had previously reported on, but the middle market exemplifies the need for experienced legal counsel in facilitating these transactions. And with the decision by the Fed to make no changes on interest rates, the affordable funding that makes these transactions possible is likely to spur more activity in 2016.
As such, corporate executives who see opportunities in middle market companies, whether they currently held by private equity firms or entrepreneurs, should rely on the expertise of an experienced M&A attorney in doing the due diligence and regulatory work to make these transactions seamless and profitable.