Lower-middle market companies are unique to the middle market, unlike companies you’d find in the upper-middle market, they tend to be more “Mom and Pops.” A recent article in the Motley Fool blog points out the surprising differences on how lower-middle market companies react to the M&A market.
Lower middle market companies represent a world of difference from their upper middle market counterparts. Rather than Ivy League educated CFOs, the lower middle market tends to be dominated by family owned businesses. Owners and managers tend to be family members.
Because of this dynamic, companies in the lower middle market are not often jumping to sell at the first opportunity. In fact, many can be reluctant to sell. Main Street Capital Corporation, who specializes in the lower-middle market, alluded that this market is often “backwards” when Vince Foster stated on a recent conference call that: