M&A Market Poised for Growth in 2025, According to a New Survey by Caber Hill Advisors

CHICAGO - Jan. 8, 2025 - PRLog -- Caber Hill Advisors, the leading advisory firm for privately held, middle-market businesses, today announced data from a recent survey measuring the current interest, sentiment, and outlook for M&A activity among some of its most active buyers: partners at private equity (PE) firms specializing in middle and lower-middle market investments in the U.S. None of the survey respondents expects the M&A market to weaken in 2025, with 1 in 4 anticipating it will hold steady, and 3 out of 4 predicting it will strengthen.

"The survey results confirm what our advisors have been hearing across our network of business owners, entrepreneurs, and buyers—it's a seller's market," said Craig Castelli, Caber Hill Advisors Founder & CEO. "The quantitative data on expected deal flow and valuation multiples contained in our survey are the kind of decision-making metrics critical for entrepreneurs debating if this year is the optimal time to exit a business."

Among the anticipated drivers of M&A activity in 2025, PE partners cited several favorable conditions: a substantial supply of "dry powder" (or available capital), robust macroeconomic growth, ongoing industry consolidation, and favorable financing options (including a lower interest rate environment).

Additionally, the survey asked partners how they assess acquisition targets. The key criteria at the top of their rankings were factors such as companies with a strong competitive advantage, high EBITDA growth potential, organic growth prospects, and a robust management team.

"Understanding how PE firms assess targets is a real value-add for business owners and potentially an eye-opener," said Castelli. "Many of the owner-founders we work with fail to appreciate the buyer's perspective. These owners over value aspects of their business like years in business, being debt-free, and other factors that investors do not consider nearly as important as EBITDA, growth outlook, or strength of the management team."

Despite optimism, the survey also revealed potential risks that might loom on the horizon. PE partners expressed concerns about the intense competition for deals, a potential economic slowdown, and the possibility of rising valuations making acquisitions less favorable for buyers.

For sellers, the current market offers a unique opportunity to prepare for a high-demand environment. For buyers, the priority will be to navigate an increasingly competitive market. Overall, 2025 looks to be a promising year for sellers, with private equity firms ready to capitalize on favorable conditions and a projected increase in M&A activity.

For more information, download Caber Hill Advisors full report, Middle Market M&A Market Survey of Private Equity Partners for 2024-25: Why It's Time for Sellers to Get Off the Sidelines (https://caberhill.com/private-equity-survey-middle-market...).

About the Survey

The data in this report was collected between October 29 and November 8, 2024 in a survey sent to 2500+ partners at private equity firms specializing in middle and lower-middle market investments in the U.S.

About Caber Hill Advisors

Caber Hill Advisors is your partner for growth. We're committed to working with business owners so they can successfully fulfill their personal and professional legacies. We draw on deep industry experience to help our clients identify and capitalize on the best opportunities available.

Across the team is a well of expertise in serving small and middle-market companies in several specialty industries. If you're interested in learning more visit www.caberhill.com.