Thank you, RCP Advisors, for new in-depth research reaffirming why the Lower Middle Markets will continue to be very attractive for M&A and business owner liquidity. Click here for full report
Private equity continues to be a strong strategic option for business owners in the lower middle market—offering growth capital, operational expertise, and value-aligned partnerships. Below are key reasons why founders are increasingly choosing to partner with private equity to scale, optimize, and eventually exit their businesses.
- Founder-Friendly Deals: Smaller buyouts often involve partnering with entrepreneurs and families who prioritize long-term vision and values—not just price
- Room to Grow: Upper quartile deals with <$10M EBITDA achieved 2.89x EBITDA growth, significantly more than the 1.88x in larger deals. Median growth was 1.51x compared to 1.38x for larger companies
- Strategic M&A: In a 5-year hold model, combining organic growth and M&A boosted EBITDA from $10M to $28.3M vs. $16.1M with organic growth alone—a 76% increase. ROIC expanded from 3.0x to 4.6x
- Unlocking Larger Capital Pools: Companies that reach scale to $20M+ EBITDA can access large PE funds & strategics
- Power of Combining Factors: When several of these value drivers are combined, they create powerful return potential—one of the reasons why small buyouts consistently outperform
If you are a founder or business owner with a business in the PNW and want to have a confidential conversation, please reach out to Ed Kirk or John O’Dore.
