Market Trends Reported in the IBBA and M&A Source Market Pulse Survey: Second Quarter 2021
Created in 2012, the IBBA and M&A Source Market Pulse Survey was designed to provide business owners and their advisors with a clear understanding of ever-changing market conditions.
Through this survey, it is possible to gain clarity on businesses being sold in Main Street (values $0-$2MM) and the lower middle market (values $2MM -$50MM). Scott Bushkie served as the originator of the Market Pulse Report with IBBA and M&A Source and has played a crucial role since the report’s inception.
A core finding of the IBBA and M&A Source Market Pulse Survey for Q2 was that there had been a significant shift between the turmoil of 2020 and the climate of 2021. Across the sizes and price ranges of businesses, sellers now have an advantage or are at least in a better position to sell their business. This is quite different from the situation in 2020.
The market has shifted towards being a seller’s market for various reasons, including the fact that many private equity groups are now looking for ways to grow their money. Acquiring an existing business has become an increasingly attractive option to buyers due to the current labor pool conditions.
Buyers are now looking at existing companies as a way to bypass attracting talent. Instead, they can secure that talent via acquiring a new business. In short, many buyers want to buy versus organically build to meet their talent needs.
Another reason now is a good time for sellers is that many buyers want to leave corporate America. This situation has likely been accelerated by the pandemic and people seeking to control their destinies. The increase in global uncertainty has made becoming a business owner increasingly attractive.
The shift in climate from 2020 to 2021 underscores the value of the IBBA and M&A Source Market Pulse Survey. Through this revealing survey, business owners and their advisors can understand market conditions and what to expect.