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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 Q3 2022 survey was conducted October 1-15, 2022 and was completed by 499 business brokers and M&A advisors. Respondents completed 452 transactions this quarter. This is the 42nd edition.
Confidence Dropping But Current Valuations Strong
Last quarter, advisors pointed to labor shortages as the biggest negative impact on M&A. Now that issue doesn’t even reach their top four concerns. Today advisors largely point to economic issues (inflation, interest rate hikes, and recession expectations) along with persistent supply chain issues as factors impacting the market.
Market optimism is dropping, as approximately 40% of advisors predict the Main Street and lower middle markets are headed for a decline in the year ahead. The remaining 60% are roughly split on whether they believe market conditions will stay the same or improve. Overall sentiment (as shown in Figure 3) indicates advisors believe valuations are headed for a downtick.
And yet, despite concerns over market headwinds, advisors continue to report a strong influx of new engagements, despite being slightly less than last year. More than 50% said their number of clients “greatly increased” in Q3 2022. And as we’ll see in valuation reports (Figure 5), current market performance remains strong.
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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