Lower Middle Market M&A Dea... | Lippes Mathias LLP

Lower Middle Market M&A Deal Structure: What the Latest Survey Data Reveals

October 26, 2025 | Corporate Blog

The “average” $25m to $50m EV deal included ~70% cash | 10% seller note | 15% rollover equity | 5% cash escrow
If an earnout existed (about 33% of deals), it reflected up to 10% more of EV post-close (on average)
LMM multiples often in the 6x to 7x+ range (size/industry)
Most attractive target features for buyers: (1) revenue consistency, (2) upside growth, and (3) EBITDA margin %
Most attractive offer terms for sellers: (1) cash @ close, (2) amount of earnout, and (3) total EV. Next in the survey was rollover equity (a key driver for many of the isponsor deals we see our clients win)
Key factors influencing sellers to sell: mix of the personal and business drivers (from buyer perspective, capital and expertise to expand, often an attractive motivator)

John Koeppel's commentary on Alliance of Mergers & Acquisitions Advisors graphic: The increasing age of baby-boomer owners continues to be the top factor driving sellers to sell. AMA&A lower middle market (LMM) survey highlights for PE and independent sponsors:

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