The Market Pulse Report, published by the International Business Brokers Association (IBBA) and M&A Source, compares conditions for businesses sold on Main Street (values of $0-$2MM) to those sold on the Lower Middle Market (values of $2MM-$50MM). The Q1 2022 survey was conducted April 1-15, 2022 and completed by 360 business brokers and M&A advisors. Respondents completed 317 transactions this quarter.

KeyPoints

  • Access to talent remains an ongoing concern. Sixty-eight percent (68%) of advisors say labor shortages have had the most significant effect on Main Street and lower middle-market M&A in Q1 2022.
  • More than half of advisors (58%) say supply chain issues negatively impact the market.
  • One-quarter of advisors believe a recession is either “very likely” or “extremely likely” in the next 12 months, with another 51% suggesting a recession is “somewhat likely.” Twenty-five percent (25%) indicated that interest rates and inflation negatively impact business transitions.
  • Fifteen percent (15%) say the Russia-Ukraine conflict has hurt deal activity.

So what?

After 40 years and nearly 2,200 successful transactions, we have learned a few things:

  • Good businesses will sell in any environment.
  • Despite the recessions of 1991, 2001, and 2007 deal flow remained somewhat consistent and in the event we do find ourselves in another recession, we don’t expect a decrease in deal flow and successful exits.
  • Despite the volatility of the public markets, the private market multiples remain +/- 10-20%, so any business owner’s focus is to have clean books and maximize earnings.

Ed Mysogland, Managing Member, Indiana Business AdvisorsMost importantly, we have always had an open shop – meaning we have complimentary exploratory meetings regularly about market conditions and business exit readiness. Most of our revenue is generated from referrals from other professional advisors. We are always happy to help a business owner maximize their exit.

Edwin Mysogland, CVA, CEPA, CVB, CMEA

Managing Partner, Indiana Business Advisors

Indiana Business Advisors
Ph. 317-218-8616
Ed@IndianaBusinessAdvisors.com

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