The continued growth in middle-market private equity (PE) dealmaking in 2024 highlights the sector’s resilience. The data reflects a significant increase, with middle-market buyout deals up by 11.5% in the first half of 2024 and positioning the stage for what could be the third-best year in history for middle-market transactions. This momentum aligns with trends we’re observing with heavy add-on investment, buy-and-build strategies, and a strong emphasis on operational improvement.

So what’s driving this continued growth?   

Middle-market firms tend to be more agile, allowing them to adjust swiftly to market changes. This agility enables private equity to implement their expertise quickly and more effectively, driving value creation through operational enhancements. The potential for significant operational improvements makes these firms particularly attractive for investment.

Additionally, larger-platform acquisitions in the middle market create a natural pipeline for add-on acquisitions. Three out of every four buyouts are now add-ons, contributing to over half of the deal value in this space. We’re also seeing more “roll-up” strategies beyond traditional sectors like healthcare services happening in other areas such as construction/building services, repair and maintenance services, wealth management firms, and landscaping.   

To successfully execute these strategies, the need for shared processes, scalable technology, and rapid acquisition integration becomes paramount. As the middle market continues to thrive, these elements will be key drivers of success for PE firms looking to maximize their investments.

US PE firms struck 1,699 middle-market buyout deals in the first half of 2024, up about 11.5% from the same period last year. This growth outpaced the broader PE market’s 9% year-over-year increase in deal volume. In fact, PE dealmaking in the middle market is on track for its third-best year ever, with the full-year deal value projected to reach $345 billion

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