Today, the IBBA® and M&A Source® present the quarterly Market Pulse Survey results, providing insights into the Q3 2024 market conditions for businesses being sold in Main Street (values $1M-$2M) and the Lower Middle Market (values $2M-$50M). Advisors report that while new client interest has spiked since a recent rate cut, deal activity has been stalled due to the November election. In the Main Street market, 48% of respondents disclosed that sellers were holding off, compared to 38% in the Lower Middle Market (LMM). This suggests a higher level of caution among smaller businesses, likely due to uncertainty around potential economic and regulatory changes post-election. Similarly, 35% of respondents in the Main Street Market and 28% in the LMM reported that buyers are also cautious, waiting until after the election to make purchasing decisions.
INDEPENDENCE, Ohio, Dec. 10, 2024 /PRNewswire-PRWeb/ -- Today, the IBBA® and M&A Source® present the quarterly Market Pulse Survey results, providing insights into the Q3 2024 market conditions for businesses being sold in Main Street (values $1M-$2M) and the Lower Middle Market (values $2M-$50M). Advisors report that while new client interest has spiked since a recent rate cut, deal activity has been stalled due to the November election. In the Main Street market, 48% of respondents disclosed that sellers were holding off, compared to 38% in the Lower Middle Market (LMM). This suggests a higher level of caution among smaller businesses, likely due to uncertainty around potential economic and regulatory changes post-election. Similarly, 35% of respondents in the Main Street Market and 28% in the LMM reported that buyers are also cautious, waiting until after the election to make purchasing decisions.
Additional Key Findings in the Market Pulse Survey Q3 2024 include:
Advisors report an uptick in deal flow in Q3 2024, stating the new client activity has "greatly increased," particularly in the Lower Middle Market (LMM).
1. Rate Cuts - Declining interest rates boost activity.
- The Main Street market is most optimistic: A majority (69.1%) of Main Street advisors agreed or strongly agreed that more deals will be completed due to the decline in interest rates. Similarly, 69.3% agreed or strongly agreed that more buyers will emerge.
- The Lower Middle Market also anticipates growth: Nearly two-thirds (65%) of LMM advisors agreed or strongly agreed that more deals will be completed in this market, and 61.6% expect more buyers.
2. Seller's Market Confidence - A bump in Q3
- Q3 trends show an uptick in confidence year-over-year in the Main Street and Lower Middle Market segments.
- With confidence on the rebound, the drop from the record high of 2021 may have bottomed out.
3. Business Value - Cautions remain
- While multiples for businesses under $1M have remained relatively constant, advisors have seen some fluctuation in larger deals.
- Valuations were modest in Q3 2024, likely reflecting high interest rates and the cautious lending climate.
"For the past 50 quarters, the Market Pulse Survey has proven to be the essential, go-to source for timely insights on Main Street and Lower Middle Market transactions. Our longstanding commitment to providing critical business data and analysis enables business intermediaries and business owners to make informed decisions, facilitating the successful transfer of ownership." - Tanya Popov, MCBI, CM&AP, CEPA, BCA, Founder of Inix Business Brokers, Market Pulse Committee Member
About the Market Pulse Report
The national, quarterly IBBA and M&A Source Market Pulse survey was created to provide a valuable resource to business owners and their advisors. The Q3 2024 survey was conducted October 1-15, 2024, and was completed by 340 business brokers and M&A advisors. Respondents completed 277 transactions this quarter. This is the 50th edition of this report.
About the International Business Brokers Association®
Formed in 1984 and with nearly 3,000 members, the International Business Brokers Association® (IBBA) is the largest international not for profit association for business brokers. The association provides business brokers with education, free benefits, conferences, professional designations, support programs and networking opportunities, and awards the Certified Business Intermediary (CBI)® designation to qualifying business brokers. To learn more, contact the IBBA directly at [email protected] [[email protected] __title__ ].
About M&A Source®
M&A Source® is the leading not for profit association for individuals and firms engaged in lower middle market business transactions. The association provides education, benefits, conferences, support programs and networking opportunities, and awards the Mergers & Acquisitions Master Intermediary® (M&AMI®) designation to qualified advisors. For additional information, contact M&A Source directly at 216-243-0030.
Media Contact
Emily Bowler, International Business Brokers Association, 888-686-4222, [email protected], https://www.ibba.org
SOURCE International Business Brokers Association
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