What Buyers Want: Deal Demand by EBITDA Range

Understanding buyer demand plays a significant role for business owners and dealmakers when it comes to navigating lower middle market transactions. One way to measure this demand is through “deal intents,” which are how buyers specify their preferences for the types of businesses they are looking to acquire. On the Axial platform, buyers create deal intents by setting up Buyside Projects.

Today’s article shares the current deal intents by EBITDA range for active buyers on the Axial platform, broken down by industry and buyer type. Based on the specified range, deals can fall into multiple EBITDA buckets; for example, a deal with an EBITDA range of $1M-$4M is included in both the $1M-$3M and $3M-$5M buckets.

Deal Intents By Industry & EBITDA Range

Across all industries, buyer interest peaks in the $1M-$5M EBITDA range, suggesting this segment is the sweet spot in the lower middle market for both scalability and affordability.

Technology stands out as the most sought-after industry in the $.5M-$3M EBITDA ranges, with 42.98% of deal intents in $.5M-$1M and 90.53% in $1M-$3M—higher than any other sector. This suggests that buyers are interested in smaller technology businesses, likely due to their potential for rapid scalability, high margins, and alignment with current trends in digital transformation and innovation.

Food & Hospitality shows the highest buyer interest across the $3M-$10M EBITDA range, reflecting its potential for steady cash flows and scalability. Additionally, 43.15% of buyer intents target Food & Hospitality businesses with $10M+ EBITDA, reflecting a growing interest in larger companies in this sector, possibly due to advancements in operations, supply chain efficiences, or consolidation opportunities.

Deal Intents By Buyer Type & EBITDA Range

Demand is concentrated in the $1M-$5M EBITDA range for the majority of buyer types, with Private Equity showing stronger interest in $5M-$10M and Individual Investors focusing on slightly lower EBITDA targets, particularly in the sub-$1M range. This demand may be due to Individual Investors’ preference for smaller, owner-operator models rather than larger, institutional-style investments.

Independent Sponsors show a balanced focus across the $1M-$10M EBITDA ranges, with particularly strong interest (90.02%) in the $3M-$5M range. This signals a preference for mid-sized businesses that offer growth potential without requiring larger capital commitments. Their versatility positions them as a potential fit for a wide range of sellers, specifically those targeting buyers who can offer operational involvement and flexible deal structuring.

Family Offices also show sustained interest across the $1M-$10M range, peaking at 89.02% in $1M-$3M. Their relatively high interest in smaller deals supports the notion that Family Offices value long-term growth opportunities and are willing to target businesses that align with multi-generational investment strategies. 

Search Funds are the most active buyer type in the $1M-$3M EBITDA range, indicating a possible preference for businesses that fit within the typical first-time operator model of acquiring manageable businesses with high growth potential.

How Many Buyers Are Interested in Your Business?

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Managed Service Provider | Revenue $8.5M | EBITDA $1.9M

Appliance Retailer | Revenue $23.6M | EBITDA $3.7M

Alcoholic Beverage Distribution | Revenue $10M | EBITDA $3M

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