Mid-market Services - An Overview

In the world of middle market transactions one thing is certain, everyone has a different definition of exactly what constitutes a “middle market” company. Here at VR Bentonville the middle market comprises companies with gross revenues between $2M - $35M and adjusted EBITDA from $700K to $5M.

While there are some similarities, middle market opportunities are valued and marketed much differently than main street businesses; in addition the reasons that people buy middle market businesses vs. main street businesses are also notably different.

VR has over 115 offices around the world offering you a network of professionals with a broad array of experience in every conceivable industry. Your business will have the advantage of proprietary marketing techniques that impart maximum exposure to your unique opportunity while maintaining the utmost discretion. The determination to market your company as a middle market opportunity vs. main street business is not determined by price or size alone. Just a few other key considerations (certainly not an exhaustive list):

  • Depth and breadth of the enterprise’s management
  • Owner(s) involvement
  • Organizational policies & procedures
  • Complexity of operation
  • Synergies with potential suitors
  • Reliability & predictability of the revenue stream
  • Likely deal structure
  • Inclusion or exclusion of working capital

Other differences between main street transactions and middle market transactions:

Main Street Businesses Middle Market Businesses
Goes directly to market for sale Usually prepared well in advance of sale
Buyer is typically buying a job Buyer is buying an investment
Virtually no interest from specialty buyers (corporations, private equity, private investment, etc…) Highest level of interest comes from specialty buyers
Usually marketed with clear asking price Rarely marketed with asking price to capitalize on strategic or synergistic buyers
Owner or CPA compiled financial statements Reviewed or Audited financials
Deal structure usually accomplished with uncomplicated “boiler plate” agreements Deal structure is often highly complex requiring customized legal documents.
Post sale Seller involvement 4 wks to 4 months Post sale Seller involvement can be 6 months to 2 years (even longer if the owner wants to maintain equity interest)
Existing company management of moderate concern Existing management may be primary motivation to acquire