Identifying middle market companies for sale

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Are you looking to buy a mid-sized company? The middle market is a great place to begin your search for an established business with potential for growth. But where do you start when it comes to finding middle-market companies that are for sale? In this article, we'll provide an overview of the steps you should take to find a potential middle-market business for your investment strategy.

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What are middle market companies?

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Middle-market companies are typically defined as businesses with annual revenues between $10 million and $500 million. These companies are typically privately held and have a well-established customer base and operations.

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Middle market companies typically have a significant presence in their respective markets or industries. They are not niche players but typically compete on a broader scale. They often have a diverse customer base, reducing their dependence on a small number of clients, but they may face certain risks associated with their growth ambitions and market competition. These companies need to manage these risks effectively to sustain their success.

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Why are middle market companies interesting for investors?

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There are several reasons why private equity and strategic corporate buyers might be interested in buying a middle market company. Firstly, middle market companies are typically established in their industry, which makes them interesting investment targets. They are still often very focused on growth and expansion, which gives investors the indication that there are probable surplus in the horizon. Furthermore, middle size companies are able to respond to changing market conditions and customer needs faster than corporations. They have market share or new markets to win, and also the ability to adapt relatively fast to do so. Furthermore, middle market companies often prioritize innovation, and they have less rigid bureaucratic structures hindering down innovation than larger firms.

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Second, middle market businesses can have a higher level of profitability than smaller businesses and are thus attractive to investors looking for steady returns. If middle market companies have been able to weather the economic downturns, they have demonstrated the executive teams' capability too steer the company in various market conditions. While they may not have the financial resources of large corporations, they have most likely had access to capital during their growth.

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Third reason for why investors are interested in middle market companies is the culture and resilience. The companies are often owned by a small group of individuals or families. This has made the ownership more motivated to maintain their market position, having more likely guarded stabler returns throughout the company's history. They can have a more formalized management structure than small businesses, making them more attractive and less risky investment targets than startups and other small companies. However, many middle market firms retain an entrepreneurial spirit despite their size, leading to a dynamic and innovative corporate culture. Along time, they have most likely also had the time to build employee talent pool which knows the company practices and systems, and stays after the acquisition or investment, keeping the company growing.

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How to find middle market businesses to buy?

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The systematic process for finding middle-market companies involves market research, company screening, and contacting companies that meet the predefined criteria. There are four main strategies to conduct the company research, each suitable for different situations. The tools used differ in their features and ability to find the right companies.

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Some of the aspects that may indicate the company's readiness for sale include:

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  • Age of the founders: An important indicator is when founders are nearing retirement age, as this often suggests a favorable time for considering a sale.
  • Company establishment: The timeframe since the company's founding provides insights into its maturity and potential preparedness for an exit.
  • Duration within private equity (PE) or venture capital (VC) portfolios: Exits tend to become more relevant after a company has spent approximately 5-8 years under the guidance of PE or VC firms.

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If you’re looking for acquiring a middle-market company, there are a few tricks for market screening. Next we discuss the sources where you can locate these opportunities.

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Software to help you locate potential middle-market companies

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One of the best places to start is an intelligent company platform that includes middle-market companies and basic information about them. Deal sourcing software helps you save time in building acquisition target lists. The software gives the user access to the data, and ensures they never miss a potential match.

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These services provide a search platform to with search features that find companies based on key factors affecting their willingness to engage in a sale. The platforms filter potential acquisition targets based on what they actually do, not based on industry or business registry codes. The filters including the company's business area, geographical location, ownership, size, and other features. Alongside the search results, the solutions provide also contact information and financial data where applicable.

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‍Gathering all this information helps to create a pool of the most potential targets, and find the best possible deal.

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Due to the highly specific nature of the required filters, utilizing deal sourcing software tailored specifically for the mergers and acquisitions (M&A) use case is generally associated with the highest return on investment (ROI). This specialized software serves as a valuable tool for those engaged in the pursuit of middle-market companies, offering an efficient way of identifying suitable acquisition targets.

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Company databases and purchased intelligence

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Commercial company databases with purchased business intelligence can uncover opportunities by scanning events in the markets. The sites are specialized for selling business intelligence to companies and offer different packages at different price points. The databases can be designed to support the storage, retrieval, and analysis of business-related data collected by the data provider. They play a role in their customers’ business intelligence, which involves collecting, processing, and analyzing data. They include a lot of data, but with an abundance of data points, the user interface can be relatively cumbersome and take time to fully take advantage of. 

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Specialized origination services

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There are many firms which provide deal origination services conducted by experts. These companies use their tools and networks to find companies according to their clients' criteria. We have compiled a list of deal origination firms here.

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LinkedIn Sales Navigator

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LinkedIn Sales Navigator is a premium subscription service offered by LinkedIn, designed for sales professionals, business development teams, and other professionals focused on lead generation and relationship-building. Sales Navigator offers sophisticated search capabilities, allowing users to define specific criteria for their search, such as industry, company size, job title, and location. The service provides lead recommendations based on the user's preferences and network connections. Users gain access to detailed information about people, including their job history, company details, recent activity, and shared connections. Sales Navigator offers InMail feature for connecting with potential companies.

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Networking with local businesses

One way to find middle-market companies to buy is to attend networking events or business seminars that focus on mergers and acquisitions. In these, you can get information and create connections for later stages.

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Connecting with specialized investment bankers and business brokers

Additionally, you can contact private equity firms, venture capital firms, and business brokers who specialize in middle-market deals. Whichever route you choose, it’s important to focus on the specific professionals that operate in your specific niche and geographic area. 

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Contacting strategies to reach middle market companies


After the market screening and company identification, contacting potential targets encompasses two primary approaches: bulk outreach, where thousands of messages are sent en masse, and customized outreach, which involves tailored efforts such as creating personalized presentations to persuade company owners to consider selling their businesses. In this section you can find the typical practices and best tips for finding and approaching middle market companies that are for sale.

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Bulk email campaigns

First up, bulk email campaigns. With drip campaigns and a combination of other methods, you can reach a large number of companies quickly. A drip campaign is a strategy that involves sending a series of automated, targeted messages to a specific audience over a period of time. Drip campaigns typically start with an initial message, followed by a series of additional messages that are triggered by specific actions or behaviors. These messages can be delivered via email, social media, SMS, or other digital channels. By delivering relevant, timely content to prospects, drip campaigns can help you build relationships with potential middle market companies, increase engagement, and drive more deals over time.

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There are various software providers that can help you send these drip campaign outreach automatically. You can use Inven to find all relevant companies and their contacts and then go to software providers such as Hunter, Snov.io, and HubSpot.


Customized bulk email campaigns

For a more targeted approach, try customized bulk email campaigns. First, you should use Inven or other similar tools to find companies that match specific criteria. With Inven, you can create a custom list of companies operating in specific industries, being family-owned, their founding year - among other criteria.

You can use this list and the contact data to send highly customized emails to these potential companies. You could send emails through your CRM or email provider, or you can use automated email messaging. The key here is to approach with something more customized than a generic email. Consider using information about their ownership or founding year.


Reaching out with LinkedIn messages

LinkedIn messages are also an effective way to connect with middle market companies and their owners. Build a list of companies using the best software and consider investing in Sales Navigator for better results. LinkedIn Sales Navigator allows you to find prospects in the target companies, create lead lists, and send InMail to them straight to their LinkedIn message inbox.

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Cold calling, voicemail and mail

Cold calling and leaving voicemails may also work, as can traditional mail. Surveys suggest that nowadays, cold calling, voicemail, and traditional mail are rarely used, which makes company owners pay more attention to those. While you’re searching for relevant companies in your niche, you can also get their phone number with Inven. Some of these methods might be suitable for your interns too! It gives them a nice challenge and proves to be meaningful, while it’s something they can easily manage.

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Niche websites

For even more targeted outreach, consider finding niche websites where middle market companies spend their time. Some of these sites even allow you to send messages directly to potential sellers. This can be highly effective as you might stand out from the crowd!

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Contacting family-owned businesses that are ready to retire

What many business brokers and investment bankers do to find middle-market deals is to contact family-owned businesses to see if they are ready to sell. Even better, you could contact family-owned businesses where their owners are close to retirement age. This might indicate their willingness to sell and change to a looser lifestyle. You can find these companies by searching for family-owned businesses and checking their owners and their age. Tools like Inven might come in handy for this.

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Highly customized outreach

If you prefer a low-volume but highly targeted approach, focus on highly customized emails followed up with customized LinkedIn messages and phone calls. Introductions are also a great way to make a connection, and custom pitch decks can help convince companies to sell.


If you know exactly what you’re looking for and are able to build a high-quality list of potential companies, you should invest time in a more customized outreach. The best practice is to first contact the owners either with email or phone call. Afterwards, you should follow-up and connect with them on LinkedIn too to make sure they remember you and your services. Contacting them on various platforms will make sure you stand out.

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In short, there are many ways to find and approach middle market companies for sale. Try a combination of these best practices and tips to see what works best for you. Happy hunting!

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Analyzing the market

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Assessing the financials of the company

When seeking to acquire middle-market businesses that are available for sale, a crucial step is to evaluate their financials. Analyzing financial statements, such as the balance sheet, income statement, and cash flow statement, provides valuable insights into the financial health of the target company. These statements offer details on assets, liabilities, equity, revenue, expenses, profits, and cash flow. To efficiently find middle-market businesses for sale, leveraging the expertise of a business broker or utilizing tools for business valuations and ranking can greatly assist in identifying suitable acquisition opportunities. The cash flow statement provides information about the company’s cash inflows and outflows, but acquiring this information can sometimes be challenging. However, advanced software solutions can assist in obtaining a comprehensive overview of a company's financials, even during the initial search phase. By leveraging the capabilities of the best software solutions, you can gain valuable visibility into a middle-market company's financial landscape, including its cash flow dynamics.

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It is also important to consider the financial ratios for the company. These ratios can help you to assess the company’s performance in relation to its industry peers. A few key ratios to consider include the current ratio, debt-to-equity ratio, debt-to-asset ratio, and return on investment (ROI). Additionally, you should look at historical financial data to get an understanding of the company’s performance over time.

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Overall, it is essential to analyze the financials of the company before making a decision to acquire the business. This will help you to identify potential risks and make sure the company is a good fit for your portfolio.

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To get financials, you might want to use some company registry or you can also find financial data directly from Inven. Inven has financial data of 43M+ legal entities from Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands and the United Kingdom. 

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Analyzing the company's strategic position

When analyzing the strategic position of a middle-market company, it is crucial to look at factors such as the company's industry, competitors, customers, products, and services. Additionally, you should assess the company's growth potential and its strategic positioning relative to the industry.

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It might also be helpful to look at the company's financial performance over time. Has the company experienced growth, stagnation, or a decline in performance? Additionally, you could consider how the company is positioned in relation to its industry peers and whether there is potential for growth.

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When evaluating the company's strategic position, it is important to consider who owns the company and who are the people involved in the business. Who are the key decision-makers? Who are the company's customers? Who are the company's main suppliers?

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Inven offers the ownership data at the same time with your search. So, when you are looking for potential middle-market companies, you can directly see their ownership already in the search results. This can save you a lot of time.

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Finally, it is important to consider the company's future plans and potential for further growth. What are the company's plans for expansion? How does the company anticipate growing its customer base? What are the company's plans for developing new products or services?

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By taking the time to evaluate and analyze the strategic position of a middle-market company, you can make a more informed decision about whether or not to pursue a deal. This information will help you do business valuations for them and then also make a better deal. Additionally, this can help you identify potential risks and make sure the company is a good fit for your portfolio.

Analyzing the relevant industry

As you are researching potential middle-market companies to buy, it is important to consider the industry in which the company operates. Through this you can understand the competitive landscape and identify potential areas of growth or opportunities for consolidation.

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The first step is to get a clear understanding of the industry dynamics. What are the key industry trends and developments? Who are the major industry players? What are the key differentiating features of the company and its competitors? What is the size of the industry and its potential for growth?

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You should also consider the competitive landscape. Who are the company's main competitors? What are the strengths and weaknesses of the company's competitors? What strategies are they deploying to gain market share? Are there any new entrants in the market?

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It is also important to assess the industry's potential for future growth. What are the emerging trends in the industry? Are there any new technologies or products that could disrupt the industry? What potential opportunities does the industry offer for consolidations or acquisitions?

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Finally, it is vital to consider the company's strengths and weaknesses. What are the company's core competencies? Is the company well-positioned to capitalize on emerging opportunities in the industry? Does the company have an existing customer base or a strong brand? You can use for example SWOT analysis to help you do this systematically.

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By taking the time to analyze the relevant industry, you will be better positioned to make an informed decision about whether or not to pursue a potential middle-market acquisition.

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Conclusion

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In conclusion, buying a middle-market company can be a complex process, but with the right preparation and due diligence, it can also be a rewarding and profitable endeavor. Before making an offer, it is important to understand all the details of the transaction, including the financial adjustments that will be made after the sale closes, any contingencies that must be met, and any liabilities that the buyer may be responsible for. Additionally, it is important to take the time to do thorough due diligence on the company, researching, verifying, and analyzing the data to uncover any potential risks associated with the acquisition. Finally, it is essential to negotiate the terms of the acquisition to ensure that you are getting the best deal possible. By following these steps, you can ensure that you are making an informed and profitable decision when buying a middle-market company.

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Final considerations for finding and acquiring a company

  • Set a budget: Before you start searching for a company, set a budget and determine how much you are willing to spend. This will help you narrow down your list of potential targets.
  • Look for the right fit: When looking for a company to buy, look for one that fits your goals, objectives, and strategy. Make sure the company has a solid track record of success and a strong customer base.
  • Research: Conduct thorough research on the company and the industry to understand the risks and rewards associated with the acquisition.
  • Verify: Verify the accuracy of the information provided by the seller.
  • Analyze: Analyze the data to uncover any potential risks associated with the acquisition.
  • Negotiate: Negotiate the terms of the acquisition to ensure that you are getting the best deal possible.
  • Finalize: Finalize the deal and close the transaction.

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Let Inven help you find all the potential middle-market companies

Inven is a software specialized to find middle-market companies. With the software, you can easily find companies based on what they actually do. You just need to input 1-3 example companies or keywords and filter based on location and headcount. Feel free to book a demo if you're interested to try it out!