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Upper Middle Market

Definition - What does Upper Middle Market mean?

The upper middle market includes companies that are subcategorized under the broader middle market, with revenue or enterprise values ranging from $500 million to $1 billion.

Divestopedia explains Upper Middle Market

The middle market is a significant part of the North American economy. In the U.S., middle market businesses represent one-third of private sector GDP and employ approximately 25% of the total labor force. Less than 1% of middle market companies fall under the upper middle market category.

It is also important to distinguish between upper and lower middle market for a few reasons:

  • There are different buyer groups for each level of middle market companies;
  • Premiums are typically paid for businesses that can grow into a higher tier; and
  • Investment banks tend to specialize in a certain size of business.
Generally, companies in the upper middle market have strong, well-recognized brands, a large portion of the market share, high barriers to entry and other attractive acquisition characteristics. For these reasons, upper middle market companies are highly sought after as acquisition targets by both strategic and financial buyers and also command premium valuation multiples.

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Resources

  • Equicapita: Equicapita
    Equicapita's model is to acquire established, private small and medium sized enterprises (“SMEs”) located primarily in Western Canada.
  • Evolution Capital: Evolution Capital
    Leaders in growing small business.