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The quarterly IBBA and M&A Source Market Pulse Survey was created to gain an accurate understanding of the market conditions for businesses being sold in Main Street (values $0-$2MM) and the lower middle market (values $2MM -$50MM). The national survey was conducted with the intent of providing a valuable resource to business owners and their advisors. The IBBA and M&A Source present the Market Pulse Survey.
The Q2 2022 survey was conducted July 1-17, 2022 and was completed by 355 business brokers and M&A advisors. Respondents completed 299 transactions this quarter. This is the 41st edition. Select data sets include 10 year comparisons from the Market Pulse Survey.
Labor Shortages Impacting M&A
Advisors say that labor shortages have had the biggest impact on deal-making in Q1 2022. In the Main Street market, 92% say its had a negative effect (54% “very negative”). Likewise, 92% say labor shortages are having a negative effect in the lower middle market (47% “very negative”).
More than 80% of half of advisors say inflation, interest rate hikes, supply chain issues, and cost of labor are also having a dampening effect.
Meanwhile, advisors say labor costs (44%) and supply chain costs (30%) are having the biggest net impact on sellers’ net income, followed by gas costs (8%).
Despite concerns over market headwinds, most advisors are seeing a strong influx of new engagements. Roughly two-thirds (67%) say they’re seeing more Baby Boomer business owners trying to exit before the next downturn or macro event.
Advisors are also reporting a strong uptick in the number of new clients coming to market. More than 54% of said their number of clients “greatly increased” in Q2 2022.
Please download the entire report (above) to read more.
About the Market Pulse Report
The Market Pulse Report compares conditions for businesses being sold on Main Street (values of $0-$2MM) to those being sold on the Lower Middle Market (values of $2MM-$50MM). The Q1 2022 survey was conducted April 1-15, 2022 and was completed by 360 business brokers and M&A advisors. Respondents completed 317 transactions this quarter. This is the 40th edition – marking 10 years of the Market Pulse Survey.
About International Business Brokers Association (IBBA) and the M&A Source Founded in 1983, IBBA is the largest non-profit association specifically formed to meet the needs of people and firms engaged in various aspects of business brokerage and mergers and acquisitions. The IBBA is a trade association of business brokers providing education, conferences, professional designations and networking opportunities. For more information about IBBA, visit the website at www.ibba.org or follow the IBBA on Facebook, Twitter and LinkedIn.
Founded in 1991, the M&A Source promotes professional development of merger and acquisition professionals so that they may better serve their clients’ needs and maximize public awareness of professional intermediary services available for middle market merger and acquisition transactions. For more information about the M&A Source visit www.masource.org, or follow the M&A Source on Facebook, LinkedIn and Twitter.
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