The Market Pulse Executive Report, a collaboration between The International Business Brokers Association® (IBBA) and M&A Source, delivers unparalleled insights into Main Street and Lower Middle Market (LMM) transactions on a quarterly basis. Brokerage Bridge proudly presents exclusive highlights from the 2024 Q3 report—offering valuable market intelligence typically reserved for contributing members.
Key Highlights of the 2024 Q3 Market Pulse Survey:
The Q3 Market Pulse Survey, conducted from October 1-15, 2024, includes data from 340 business brokers and M&A advisors. This comprehensive analysis captures trends and conditions in the Main Street ($0-$2M) and LMM ($2M-$50M) sectors.
What’s Inside the Report?
- Market Trends:
- Multiples for smaller businesses (<$1M) remained stable, while larger deals experienced fluctuations due to cautious lending and interest rate shifts.
- Sellers received 76-92% cash at closing, with larger deals ($5M-$50M) often utilizing earnouts and equity retention.
- Seller & Buyer Behavior:
- Retirement continued to be the dominant reason for sales in larger deals, while smaller deals were influenced by burnout (19%) and new opportunities (17%).
- First-time buyers led smaller business acquisitions (52%), while LMM buyers included strategic purchasers (37-39%) and private equity firms (32%).
- Proximity insights: 67% of Main Street buyers were local (within 20 miles), but 47% of LMM buyers were located over 100 miles away.
- Industry Focus:
- Personal services and consumer goods led in the Main Street market, while construction, engineering, and manufacturing stood out in the LMM sector.
- Larger deals attracted more offers, averaging 2-3 offers per deal.
Key Takeaways for Q3 2024:
- Both buyers and sellers are exercising caution ahead of upcoming elections, with hesitancy most pronounced among Main Street sellers (48%).
- Optimism grew from declining interest rates, with 69% of Main Street advisors and 65% of LMM advisors anticipating increased deal activity. However, expectations for rising valuations remain modest.
- Deal flow saw growth but was tempered by economic and regulatory uncertainties.
This survey showcases a market navigating optimism from declining interest rates while grappling with election-related uncertainty and cautious lending practices.
Ready to learn more? Watch the video to dive deeper into the trends shaping the 2024 Q3 market and discover how these insights can empower your brokerage decisions!