Lower Middle Market
属于该市场类别的企业每年收入在500万至5000万美元之间。
When referring to the middle market sector of theeconomy, which is determined by the firm's yearly income, the phrase "lower middle market" is used. Businesses that fall within this market category generate annual revenues between $5 million and $50 million.
中下部市场的公司通常被评为中小型企业（SME），年收入低于500万美元。
The employed capital assets and the number of employees are other measures that may be utilized in specific situations, even though the annual revenue is the most typical criterion.
有超过90%的中型企业being lower-middle-market, this is often the largest number of businesses in most economies throughout the world. Lower-middle-market businesses typically contribute significantly to both the national and international economies.
They frequently contribute significantly to the creation of jobs and thegross domestic product(GDP) in their respective national economies.
为什么并购正朝着中下市场
作为一些最受欢迎的资产，中间市场业务为并购投资者提供了回报的最佳环境之一。中间市场公司呼吁许多私募股权（PE）公司和战略收购方。
This is because there are more companies to invest in, more potential to develop enterprises, and lower valuations and entry hurdles (strategics). That allure, though, comes at a price-increased competition in a middle market that is already oversaturated.
The lower middle market is becoming more and more popular among strategic investors and PE firms as a result.
The rise in opportunities offered by the lower end of the market, combined with other elements that make it a gold mine for investors, are the main reasons for this market segment's growth.
Despite the size of deals in the upper middle market, rising M&A target rivalry is raising valuations in this industry, raising the bar for returns on investments and making it more difficult to meet.
投资者可以以更好的价格收购公司，并扩大这些公司，以通过关注下部中层市场来为其投资组合产生必要的收益。这就是为什么这一市场变得更加竞争的原因。
基本面
Small- to medium-sized businesses with annual sales between $5 million and $50 million are considered to be part of this market. Businesses in this group typically receive more offers from investors interested in buying them, even though it takes a lot of work to obtain them.
许多人经常低估企业进入下部中部市场的困难。公司的复杂性在下层市场上升。
You must learn how to manage managers if you want to go upstream from being a microbusiness to a medium market firm. Therefore, management and hiring abilities are crucial in the lower middle market.
The owner of the organization must develop management skills and understand how to define and monitor standards.
Because there are so many alternative capital sources available, lower-middle-market companies can compare them all and选择资本结构that best suits their needs.
在这个市场的最后，有很多业务在非常分散的领域工作。
Simply by driving around any local area, you can observe this fragmentation in anything from HVAC equipment suppliers and servicers to pool maintenance and other small companies.
当一个部门高度分散且有利可图时，它为战略和财务购买者创造了一个“最佳点”。
For instance, private equity plans frequently use a strategy that involves purchasing a larger "platform company" before looking for smaller "bolt-on" acquisitions in the lower middle market to expand the business from there.
The tactic is frequently known as a "roll-up." If executed properly, it can result in substantial gains for both the buyer and the acquired business. In the lower middle market, owners and managers frequently seek retirement-related exits. Buyers and sellers can both benefit from this reality.
在决定退休或离开之前，没有任何继承计划是很常见的。如果没有强大的高级管理人员网络，小型企业通常很难转移，将公司转移到一个人的后代通常也不是一个可行的选择。
Other times, the idea of selling the company pops into someone's head on the spur of the moment in response to personal "黑天鹅" occurrences like health issues.
How to Manage Lower Middle Market Businesses
Numerousboutique investment banks私募股权公司专注于这一市场类别，并发展他们在那里收购的技能。
我nvestors often utilize the classification to weigh the category's strong growth potential against the associated risk to arrive at reasonable valuations.
Due to the lowervaluation在这种市场中的倍数，许多潜在的买家经常在那里寻找购买前景。
For companies in the lower middle market, skilled business buyers can also get operational upgrades more quickly. Avaluation premiumis generally demanded by these companies since they have a greater chance of expanding and joining the upper sector.
结果，分类导致剥离市场的健康发展。
Although it is not always the case, the majority of top management positions in lower middle market companies are held by family members. You must develop good interpersonal skills to run a profitable firm in the lower-middle market.
你的能力将决定ccessful your firm is. In general, hiring is important, but it is considerably more critical in the lower middle market.
The success or failure of the firm will depend on whether the appropriate people are in the proper positions because the business owner can no longer participate in every decision.
This indicates that there is a large amount of available capital in the market. According to reports, 70 percent of these companies are expected to change hands in the next ten years.
我n addition to the enterprise value, it's critical to comprehend the goals of investors and any potential synergies that could result from a purchase. The total is larger than the sum of its parts, as they say.
下层市场业务所采用的manbetx3.0手机客户端财政资源
While some strategic firms use M&A to purchase new goods and services to be competitive in their sectors, PE companies are chasing high portfolio returns. Deal flow and values will remain robust due to these two market drivers.
Therefore, business owners considering exiting their company must be flexible and quick to seize chances. Owners must be well prepared and aware of their obligations before they can reap the potentially huge financial rewards.
1. Bank Loans
For lower-middle-market businesses in good financial standing, bank debt is the most prevalent and reliable source of finance. Typically, banks require an operating history of at least five years, with the most recent years being profitable.
You may be wondering what financing choices are accessible to these companies. They're in an awkward spot between larger, more established enterprises that rely on bank loans and startups that rely on angel investors andventure capital. So what do they do?
The answer is middle market lending, a term used to highlight the adaptable funding choices available to these firms to advance their businesses.
Although banks have historically offered few lending options to middle-market businesses, this issue worsenedafter the recessiondue to heightened regulation and compliance worries for banks.
我n response to these more stringent regulations, banks prioritized upper-market companies with reliablecash flow, adequate collateral, and low debt-to-income ratios. Since private lenders do not have the same restrictions as banks, middle market enterprises have started using them.
Because of this, these institutions can assume more risk, build stronger partnerships with businesses, and offer flexible, multi-layered financing that encourages rapid growth.
2. Mezzanine Debt
Mezzanine debt is a category of debt that resembles equity in some ways.Mezzanine financingis mostly utilized by lower-middle-market companies as a source of funding for acquisitions, while it can also be used for growth capital and other financial requirements.
我t has several advantages, including little to no dilution and a comparatively higher investment quantity. This makes it the perfect method for funding family-run enterprises.
夹层融资结合了debt and equity financing, giving lenders the option of converting equity interest in the event of a loan default, which is one common type of middle-market loan.
Unlike typical bank loans, a mezzanine loan is very flexible, requires little collateral, and finances a business according to its capital flow. It is possible to organize the loan as preferred equity for capital financing or according to the order in which it is paid.
由于其提供的财务利益，夹层融资特别诱使企业家和家族企业。这是因为它使他们能够收集可能无法实现的利润。他们可以使投资多样化并因此获得流动性。
3.基于资产的贷款
当公司的资产用作信贷额度安全时，基于资产的贷款可以提供必要的资金。
With some funds being advanced against capital assets as well, the asset-lending class primarily focuses on inventories at 61% andaccounts receivable平均86％。
Senior debt loans allow businesses to borrow money at low-interest rates with low risk to the lender. In exchange, firms pledge their tangible assets as collateral.
Because the loans they provide are considered senior debt, the holders are secured creditors. These are lenders who are protected by the company's assets and will be paid before other creditors if a company ceases to exist and/or files for bankruptcy.
The term "asset-backed" or "asset-based loans" is another name for these types of loans.
4. Companies with a public or government sponsorship
我f you need money for recapitalization, growth acquisitions, expansion buyouts, etc., public entities and government-sponsored entities are good places to start looking.
概括
The proper buyer, whether financial (private equity) or strategic, will always offer profitable options that enable the off-ramp and transition that the current ownership is looking for.
结果，在市场末端，对企业的需求急剧上升，以及所有权觉醒以了解和评估销售程序的优势。
A steadily expanding pool of capital is held by investors who are eager to invest it to get returns that they cannot acquire from other sources. Compared to much larger enterprises, they enable investors of all stripes to buy assets with very little debt and, consequently, risk.
Another factor that must be reviewed when selling your company is the impact of the COVID-19 pandemic. Numerous small enterprises at the lower end of the market have been harmed, if not destroyed, by COVID.
另外，它prolonged the mergers and acquisitions过程。这两个条件导致了需求和供应量的限制，随着经济开始恢复，活动和交易量的显着增加。
Owners of businesses must be prepared to seize possibilities for sales as they arise. Selling your business involves several considerations. Different people and organizations will drop by to ask questions regarding the potential sale of your business.
我t may be tempting to accept the first offer that comes along. However, it is important to gain a thorough grasp of the larger market and where the greatest synergies/motivations and, hence, the best valuations may be discovered.
通常，各种业务的商机通常比人们预期的和潜在的购买者更多。
我nvestors increasingly view these vehicles as sources of greater returns, which is why the trend toward middle-market funds goes beyond a cost-cutting measure for specialist funds.
Compared to co-investments and small- to medium-sized generalist funds, "small to medium-sized sector specialist funds" had a higher potential performance rating.
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