Middle Market M & A, 2nd Edition

CHAPTER 1The Middle Market

The middle market is at once the most dynamic part of the U.S. economy and the least known. Smaller than the celebrated, multinational enterprises that participate in global markets, trade on public stock exchanges, are the subject of most academic research, and fill the pages of the Wall Street Journal, Fortune, Harvard Business Review, and other publications, middle market companies go about their business relatively undocumented and usually unheralded. The vast majority are privately held, so publications and broadcasts devoted to investment ideas ignore them. Academic studies are relatively rare. Most are too small to merit the interest of strategy consultancies like McKinsey and the Boston Consulting Group, whose publications about superior management practices focus on the multinationals that are their target market.

At the same time, middle market companies get less attention than small business. The U.S. federal government (and states, following the federal lead) tracks small business performance through the Small Business Administration (SBA), the Bureau of the Census, and other entities. The SBA, now a cabinet‐level agency, advocates for small firms in Congress and in the deliberations of other cabinet departments and government agencies. It orchestrates the provision of counseling services that reach over 1 million entrepreneurs and small business owners annually. Because there are so many small businesses—more than 30 million by the SBA's ...