The likely buyer for an owner-run company is often no longer the regional competitor of a decade ago. In this Fast Company piece I describe who is buying now, why the type of buyer sets the price, and why owners should name their most likely buyers before a sale process begins.
Summary
The core argument: private equity-backed platforms now drive most lower-middle-market activity, and an owner who prepares for the buyer of ten years ago is preparing for someone who is no longer coming. Citing Cherry Bekaert's 2025 report, the article notes that nearly three in four of all lower-middle-market transactions now go to private equity add-ons.1
The residential trades changed fastest. Five years ago, the typical buyer for an HVAC, plumbing or electrical company was a regional competitor who knew the market and the owner. Today it is frequently a platform that has bought a dozen regional competitors in the last two years and runs a playbook.
Same revenue, same customers, same books. Three buyers can still read three different companies, and only one of them is likely to pay the most.Ron Smith, CM&AA, Founding Partner
The same company can draw very different numbers from a strategic acquirer, a private equity firm and a family office. The customer concentration a strategic buyer will pay extra for is the very thing a private equity buyer discounts. An owner who does not know which buyer is reading the company is negotiating without a map.
The gap shows up after the letter of intent. Drawing on GF Data's record of first-half 2025 transactions, the article reports that in most deals under $50 million, adjustments after the letter of intent cut more than 15% off the price.2 The exact figure moves by industry. The direction does not.
The example
The article's illustration, not a reported deal. Both figures are proceeds at closing, before the owner's personal taxes.
The advice is plain and early. Identify your three most likely buyers, by type, before the process starts, because preparation choices are hard to reverse once a sale is under way. The research behind this piece is published as Working Papers 001 and 002 of the Cordis Institute.
Related
Cite this
Smith, R. (2026, June 24). The New Players In Middle-Market Mergers And Acquisitions. Fast Company Executive Board.
Cordis works with owners preparing to sell and with owners growing through acquisition.
A written read of how a buyer will see your company.