Resilience and opportunity:  Navigating the current M&A market with a recent case study

Strategic acquirers and private equity (PE) firms actively target high-quality businesses with strong financials, distinct market positioning, and operational synergies that create long-term value. For business owners and sellers, this environment offers a chance to maximise their company’s growth potential, secure competitive valuations, and achieve successful exits. 

Those who invest in financial preparedness and operational efficiency attract heightened interest from both financial and strategic buyers, increasing their likelihood of securing favourable deal terms. 

Market trends currently shaping middle-market M&A:

Private equity dominance

Some trends are more prominent than others, such as PE’s dominance in the space. PE firms remain aggressive, deploying capital through platform acquisitions and add-ons to drive value creation. In fact, the latest EY-Parthenon Macroeconomic Outlook predicts a 16% rise for PE M&A this year.

Trends in M&A extend beyond PE, making an impact on strategic acquirers, resiliently performing sectors, and sellers.

Strategic acquirers focus on synergies

Corporate buyers are increasingly focused on acquisitions that enhance market share, expand product offerings, or improve operational efficiencies. This shift is reflected in PwC’s Global M&A Industry Trends Report, which shows that the number of deals valued at USD 1 billion+ rose from 430 in 2023 to more than 500 in 2024, with average deal sizes growing by 11%. 

The growing size and volume of deals underscore the demand for larger, more strategically aligned acquisitions in today’s market.

Resilience in high-growth sectors

Sectors such as technology, healthcare, and industry continue to attract significant investor interest, driven by their strong growth potential and the promise of high returns. However, according to a recent Business Insider’s article, major buyers, such as Big Tech and retail companies, demonstrated a limited appetite for acquiring high-growth startups in 2024, resulting in a shift in acquisition strategies.

The article notes that while PE firms are increasingly interested in healthcare technologies, many of their recent acquisitions have been public companies, often those already demonstrating stable revenue and profitability, rather than high-growth startups.

This trend indicates a strategic shift among major buyers towards more stable and established companies, potentially altering the landscape for high-growth startups seeking acquisition opportunities.

Prepared sellers gain an edge

Businesses with strong financials, a clear growth strategy, and streamlined operations are securing premium valuations and attracting increased interest from both financial and strategic buyers.

Case study: Harney Hardware’s ale to PrimeSource Brands

A recent transaction exemplifies these market dynamics: the sale of Harney Hardware, a leading provider of specialty hardware products, to PrimeSource Brands, a portfolio company of Clearlake Capital Group, L.P. 

Hyde Park Capital served as the exclusive investment banker to Harney Hardware, advising on the transaction and ensuring an optimal outcome for the company’s shareholders.

Harney Hardware has built a strong reputation in the industrial sector as a trusted supplier of high-quality products, serving both commercial and residential customers. This transaction, which marks PrimeSource's sixth acquisition since partnering with Clearlake Capital Group in December 2020, exemplifies strategic expansion through targeted acquisitions. 

The acquisition by PrimeSource Brands aligns with the company’s strategic objective of expanding its product offerings and geographic reach while leveraging operational synergies.

This transaction highlights key takeaways for business owners considering an M&A event:

Strategic fit drives value: Finding the right acquirer that shares a similar vision and can drive growth post-acquisition is essential for maximising value.

Preparation is key: Companies that invest in financial diligence and operational improvements ahead of a sale are better positioned to attract strong buyers and negotiate favourable deal terms.

Market timing matters: Despite broader economic uncertainties, well-performing businesses in attractive industries continue to receive strong interest from both strategic and financial buyers.

Trusted partnerships: Navigating the complexities of M&A requires more than just financial acumen; it also involves trusted relationships with experienced advisors who understand your goals and industry.

Looking ahead

For business owners, these trends and evolving landscape offer a unique opportunity to maximise growth potential, secure competitive valuations, and achieve successful exits, especially if they position their companies for financial stability and operational efficiency.

Navigating the complexities of M&A requires a combination of financial expertise, strategic foresight, and trusted relationships with experienced advisors. As businesses look to capitalise on favourable market conditions, having the right guidance can make all the difference in achieving a successful transaction and realising long-term value.

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Becca Stapp is the marketing manager at Hyde Park Capital, leading branding, content, and event strategies to enhance the firm’s visibility and support investment banking deal flow. She joined the firm in 2024 and brings expertise in private equity marketing. Becca graduated Magna Cum Laude from Florida State University with a degree in Communications.