Competition for quality businesses is intense — valuations are high, capital is sitting on the sidelines, and every deal seems to attract multiple bidders within hours. Traditional private equity groups, search funds, and strategic acquirers are all circling the same set of assets, which has pushed multiples to levels that more often do not make economic sense.
At the same time there’s a real bifurcation developing:
• Underserved, fragmented sectors — plumbers, HVAC, electrical, specialty services — remain compelling. They’re resilient through cycles, recession-tested and often founder-led without a ready succession plan. These businesses still trade at reasonable multiples relative to institutional targets.
• Scale-able tech-enabled businesses continue to command outsized premiums. That’s where buyers with strategic vision and patience are placing their chips — because growth and defensibility matter more than ever.
For acquirers with conviction and the ability to move quickly there are still opportunities. But the days of easily sourced off-market gems at conservative prices are fading. You need a thoughtful strategy, disciplined valuation and a willingness to say no to deals that don’t align with your return profile.
If anything the current environment rewards builders over bidders — those willing to invest in operations post-close, drive organic growth and integrate thoughtfully across divisions.