Currently, 79% of mid-market firms are considering acquisitions or being acquired within the next year, with driving revenue growth and expanding geographical reach being two of the top acquisition drivers. On average, mid-market firms aim to purchase 2.4 businesses in 2014, with most spending under $10 million. The top concerns about acquiring are inherited liabilities, thorough due diligence, losing key employees, and overpaying. When selling, the top concerns are being underpaid, losing key employees, impacts on quality perception, and losing control. Valuation, bidding/negotiations, due diligence, and developing a buyer list are the most important tasks for advisors.

1. December 2013
LATEST MID-MARKET M & A RESEARCH WHITEPAPER
Acquisitions:
Currently 79% of mid-market firms are in the process of making an acquisition or are open to
doing so within the next 12 months, with 31% of these open to the idea of being acquired
within the same 12 month period.
14% of firms are actively seeking a target for acquisition, whilst 40% are passively receptive
or opportunistic in regards to acquiring or being acquired. Market optimism is high, with over
50% of firms taking the viewpoint that today’s prices will remain stable and over one third
believe that prices will increase.
Key acquisition drivers of mid-market firms are represented below:
24%
23%
41%
41%
41%
40%
37%
36%
34%
33%
30%
30%
70%
Drive revenue growth
Expanding geographical reach
Improving operational efficiency
Add adjacent products or services to core offerings
Put surplus cash to work
Better meet market expectations
Eliminate a competitor
Increase production capacity
Expand human resource pool
Access technology / technical capabilities
Best way to accelerate growth
Enter a new vertical market
Improve distribution capacity
On average mid-market firms aim to purchase 2.4 business in 2014, with the majority (56%)
spending under $10m to do so and 30% intending to spend between $10m and $50m.

2. 38% of all business aiming to sell, are only looking for a partial sale, the key drivers to selling
both the entire organisation or part of the organisation below:
Selling the entire organisation
Selling part of division

3. Concerns related to acquiring
The top four concerns firms have when acquiring are the inherited liability they may come
across (35%), the due diligence (27%), losing key employees after the acquisition (27%) and
overpaying for the firm they acquire (26%).
Inherited liability
Due diligence
Losing key employees after acquisition
Overpaying / over evaluation target firm
Client perceptions of impact on quality or service
Merging differing corporate cultures
Distraction during process
Disruption during integration
Market fluctuations affecting asset values
Legacy issues / disruption of succession plans
Lack of knowledge of process
Acquisition tasks for advisors
9%
12%
16%
20%
19%
27%
27%
26%
25%
25%
35%
It is no surprise that the top four acquisition tasks for advisors closely relate closely to the top
four acquiring concerns - these tasks being; valuing the target firm (77%), due diligence
(68%), financing (60%) and opportunity assessment (59%).
18%
50%
47%
60%
59%
59%
68%
77%
Valuation
Due diligence
Financing
Opportunity assessment
Build bidder / buyer list
Bidding strategy / negotiation
IM / offering book
Integration

4. Concerns related to selling
The top four concerns firms have when selling are being underpaid or undervalued (41%),
losing key employees (33%), clients perception of a change in quality (31%) and losing
control of their business (27%).
Being underpaid / undervalued by acquirer
Losing key employees
Clients perception of impact on quality or service
Losing control
Merging different cultures
Meeting stated targets ( revenue or growth )
Disruption to business practices after sale
Selling tasks for Advising
22%
22%
22%
27%
26%
33%
31%
Valuation (85%), bidding/negotiations (69%), due diligence (62%) and building the
bidder/buyer list (59%) are the top four tasks for advisors preparing to sell a business.
62%
59%
Valuation
Bidding/negotiation
Due dilligence
Build bidder/buyer list
Opportunity assessment
Offering booking/IM
Financing/funding
In relation to skill and expertise, business brokers received the lowest score for all three
categories of firm size (5-25, 25-100, >100)
41%
Distraction during sale process
10%
28%
45%
58%
69%
85%
Integration