Confronting The Mid-Market M&A Valuation Gap

Firmex and Mergermarket recently published a report entitled Mid-Market M&A: The Valuation Gap (the Report), which explores valuation challenges that buyers and sellers are facing in mid-market M&A.

According to Mergermarket data, the number and value of American and Canadian mid-market M&A deals (US$10m to $250m in value) slipped year-on-year, with the slump continuing into the beginning of 2016. The valuation gap between buyers and sellers may help to explain why mid-market M&A momentum has stalled, despite high buyside interest.

Some experts contend that the valuation gap is in part due to the prevailing expectations of sellers, which are driven by the widespread publicity received by lucrative M&A deals and attractive valuation multiples for businesses across a broad range of industries. The availability of credit and heightened competition for high quality mid-market businesses has raised valuations for select companies which, in turn, are widely reported in