January 2022 Lower Middle Market Recap
January 2022 Lower Middle Market Recap
Happy Friday and welcome to this month’s edition of The Lower Middle Market. We’re the only news source tracking lower middle market M&A. Our goal is to keep you up to date on what’s happening in the market by highlighting the latest news, transactions, and activity.
January 2022 Lower Middle Market M&A Recap
January was another remarkable month of transactions, fundraising, and activity within the LMM. Despite additional pandemic disruptures and shocks to the public markets, we found this tweet regarding private equity to be illuminating and timely:
In breaking down some of the lower mid-market activity and news from January 2022, a handful of trends and highlights are worth sharing:
In terms of deals that closed in January, software/technology and manufacturing/industrial lead the way. However, there’s been a lot of talk about healthcare and transportation deal activity picking up - it could be a trend to watch through Q1.
Sole Source Capital was the most active investor making 5 add-on acquisitions across its printing, POS solutions, and supply chain automation platforms.
LFM Capital was the most active seller in exiting industrial automation company Eckhart to Arsenal Capital Partners. LFM also sold forestry mulcher manufacturer, Fecon, to Windjammer Capital.
Two firms successfully closed funds:
Seaport Capital closed its sixth fund with $240 million in capital. Seaport will use the fund to focus on opportunities in business and information services, communication services, and media sectors.
Firmament announced the closing of a $475 million, third fund. The firm will continue to concentrate on software and services businesses in the healthcare, logistics, wellness, and environmental sectors. Firmament also announced three locations in Miami, Chicago, and Nashville, where it expects to generate substantial deal flow.
Cleveland-based CapitalWorks rebranded as CW Industrial Partners to highlight the firm’s manufacturing and industrial services focus in the lower middle market.
Transactions Happened
Seaport Capital acquired craft beer keg company HopGistics Link
NCK Capital invested in equestrian products distributor English Riding Supply Link
Generation Growth Capital acquired archery sporting goods brand, Killer Instinct Link
Balance Point Capital invested in 35 Taco Bell stores across the Mid-Atlantic region Link
Godspeed Capital acquired Savli Group, a provider of mission critical software and IT solutions to the U.S. Government Link
O2 Investment Partners invested in communications and PR firm, BerlinRosen Link
Search fund, legio X, acquired Brain Power Enrichment Programs with the backing of Sage Capital Partners Link
Other Stuff
Valuations are expected to remain on fire for top-tier companies Link
The great resignation in the middle market Link
A record year in private equity drives competition for lucrative industries Link