PE Today: PE Buyers Take the Lower Midmarket Acquisition Lead

Read the top headlines from Wednesday, May 4, 2022 below:

PE Buyers Lead Lower Midmarket Acquisitions for Q1

Private equity buyers represented the largest portion of lower middle-market acquirers for the first quarter of the year, according to a new report from Axial. The company announced its Q1 Lower middle Market Pursuits report and, in an announcement this week, noted that the data reveals continued resiliency of M&A activity across the lower middle market.

Both private equity and independent sponsors increased their presence in lower midmarket acquisitions for the quarter. PE buyers represented 26.8% of acquirers, compared to representing 19% during Q1 of last year. Meanwhile ,independent sponsors represented 23.6% in 2022’s first quarter.

Axial’s report also pointed to add-on acquisitions as a driving force of continued M&A activity across the lower middle market, building upon continued momentum seen in 2021. However, the data also suggests a slight downturn in activity, with slightly less buyer interest and information solicitation seen in the first quarter compared to the same period in 2021.

“The bad news is that the lower middle market may no longer be the best-kept secret in M&A,” said Axial CEO and founder Peter Lehrman in a statement. “The good news, though, is that there is no shortage of deals to go around. The data suggests 2022 will be another perfectly robust year.”

Related content: Four Steps to Building a Better Board at Lower Middle-Market Companies

Mill Point Capital Invests in Tile Distributor Cancos Tile

Mill Point Capital, a middle-market private equity firm, announced its partnership with Cancos Tile Corporation, which is a distributor and retailer of luxury ceramic tiles and natural stone. Mill Point’s investment in the business deploys its Executive Partner model, an announcement noted, with Cancos Tile fitting squarely within the private equity firm’s focus of distribution businesses. In a statement, Cancos board member Robert Valva said that “the partnership with Mill Point secures the resources necessary to continue our long-term growth trajectory.”

The Jordan Company Backs B2B Data Software Company Flywheel

Private equity firm The Jordan Company has invested in enterprise data software company Flywheel, which coincides with the launch of its No Code Data Activation Platform, according to a press release. Flywheel co-CEO Chris Sell noted that the last 18 months have seen “a major shift” of businesses moving away from customer data platforms towards “the Modern Data Stack.” Investment from The Jordan Company will drive Flywheel’s customer and partner support initiatives amid that shift, while also fueling the company’s investments in automated intelligence.