AXIAL Article - Mid-Year Pulse Check: LMM Dealmakers Weigh in on 2H 2025
Read Full Axial Report
by Kaitlinn Thatcher
My takeaways from the article: As we enter the second half of 2025, sentiment among lower middle market (LMM) dealmakers remains cautiously optimistic. According to Axial’s recent survey of approximately 40 active buyers and advisors:
- Buyers Stay the Course: Over 93% expect to meet their full-year acquisition targets, citing disciplined underwriting and selective dealmaking. Valuation thresholds remain largely unchanged, though half are willing to stretch for premium assets.
- Seller Sentiment Shifts: Advisors report increased engagement from sellers, with many re-entering the market opportunistically. While macroeconomic uncertainty persists, most sellers are not bearish—just cautious.
- Execution Challenges Persist: Deal difficulty has increased for many, driven by AI-related valuation concerns, diligence discoveries, and shifting Small Business Administration (SBA) policies. However, most stalled deals are being put on hold—not abandoned.
- Creative Financing on the Rise: Seller financing, earnouts, and private credit are increasingly used to navigate interest rate pressures and valuation gaps.
- Valuations Hold Steady: Multiples are expected to remain stable, with strong buyer competition and business performance offsetting macroeconomic headwinds.
Bottom line: Quality businesses continue to attract interest, and both buyers and sellers are adapting with resilience and creativity. For business owners considering a sale, now is a strategic time to prepare and engage.
If you are interested in learning more about buying or selling a business, contact Eric J. Gall at 239-738-6227 or [email protected].
