Ever wonder where the most entrepreneurs are making the most money for their business-building chops?
We looked at the last decade of US mid-market M&A transactions to see how the most active industries performed. They are:
Technology
Healthcare
Financial
Consumer Discretionary
Manufacturing
Energy
Others
(We define “mid-market” companies as those with revenues between $10 and $500 million.)
Which Industry Closes the Most Deals?
Tech, Consistently
In 2023, Tech obviously dominated all the industries by number of closed deals over the preceding decade, albeit with a “steady-as-she-goes” style.
What About in Most Recent Year?
For deal count by industry in 2003 alone, see below. Tech transactions numbered nearly 4,000.
Which Industry Leads in Dollar Volume?
Tech Again
Here’s what 2003 dollar volume by industry looked like. Tech is the runaway best seller, nearly twice the up-and-coming #2, Healthcare.
What About Average Deal Value?
Tech Gets Top Honors Here Too
And Rates of Growth?
Deal Count Growth
For a change, Tech isn’t in first place. In fact, it has among the slowest growth rates in deal counts of any industry. But it’s remarkably consistent year over year, and as you’ve seen, it’s huge, with an average deal-count market share of 25%.
Slower percentage growth is typical in any business as the number of units grows (except in government).
Dollar Volume Growth
Fastest growth in dollars goes to the “Others” industry, with Tech coming in second.
In “Others” is mostly three sub-industries -- Telecom, Media, and Utilities. Together, these three account for about half of the dollar growth in the “Others” industry, with Telecom having grown the fastest.
BTW, many sellers in the third-place Healthcare industry could also be characterized functionally (that is, as being in the Tech industry.
Growth in Deal Value
Here’s how we calculate average value per deal: divide total dollar volume in a given year by the number of deals closed. The Manufacturing industry saw the largest increase in value per deal, with Technology and Others close behind, both with a 3.3% CAGR.
But compared to inflation, all industries saw real dollar declines in average deal value over the last decade. This may, in fact, be good news for sellers: what’s probably happening is more M&A “dry powder” chasing progressively younger, smaller companies.
In Sum, Tech — The Big Kahuna
Year after year, Tech has reliably driven more M&A deal closings at the highest value per deal among US mid-market industries. For entrepreneurs seeking their fortune, Tech is the industry of choice.