USA – ILLINOIS Trends and Developments Contributed by: Mitchell Roth, Michael Shaw, Andrew Silver and Peter Shepard, Much Shelist, P.C.
cially those that are family-owned and do not have robust succession plans, to take the best offer avail - able now to ensure a healthy exit. On the other hand, buyers have the opportunity to put capital to work that was aggressively raised on the heels of the frantic M&A market of 2020–2022. Buyers have struggled to put those dollars to work through M&A over the past several years, as it competes against the trepidation to overpay for underperforming target companies. As multiples on valuations have retracted in certain sec - tors, buyers have been able to right-size their offer structure to today’s middle-market seller. Sector Spotlights Manufacturing, distribution, industrials and CPGs Illinois’s manufacturing strength, especially in food processing and precision components (including con - sumer packaged goods), is attractive to both stra - tegic consolidators and financially backed sponsor platforms. Tariff-sensitive importers and exporters are navigating pricing and supply chain adjustments, but domestically focused producers remain in demand. Additionally, brands with strong regional footprints, loyal customer bases and potential for geographic expansion continue to draw middle-market investor interest, especially in the food and beverage industry. Healthcare services and life sciences With a strong base of hospitals, research institutions and healthcare service providers, Illinois is a hotspot for middle-market healthcare deals. Regulatory sta - bility and recurring revenue models make this sec - tor particularly appealing. We have seen steady deal activity in this space and expect such to continue through the end of 2025 and into 2026. Technology and SaaS While large tech transactions have slowed nation - ally, niche software providers and IT services firms remain attractive to both private equity and strategics, with Chicago’s growing tech corridor providing fertile ground. With the ever-evolving influence of artificial intelligence, the innovation and market sophistication could lead to an increase in deal activity. Service-based business A core part of any M&A market, service-based busi - nesses continue to be attractive for acquisition growth.
Industries such as transportation, landscaping, waste services, home care, HVAC, pavement repair, informa - tion technology and professional services have been lucrative middle-market targets in recent years, and we expect them to continue to be one of the pillars of the next surge of M&A activity. Companies provid - ing critical, recession-proof environmental services have had a strong attraction for acquisition, not only in Illinois, but throughout the country. Companies with efficient operations, substantial market share and essential service offerings remain strong M&A targets in today’s market. Where We See the Middle Market (And Where It’s Going) The US M&A market is transitioning from a period of hesitation to one of cautious optimism, with the middle market at the forefront of this shift. While certain risks remain, such as tariff policies, election-year political uncertainty and potential shifts in credit conditions, financially backed sponsors with flexible investment mandates, strong operational capabilities and sector expertise will be best positioned to navigate these uncertainties. For private equity firms and financially backed spon - sors, the current environment calls for a disciplined but proactive approach: seeking assets with defen - sible market positions, focusing on operational effi - ciencies, and being prepared to move quickly when high-quality opportunities arise. For strategic buyers, now more than ever, the oppor - tunity is ripe to leverage strong balance sheets to secure market share, enter new geographies, or acquire capabilities that would be costly to develop organically. For sellers, valuation recognition, market expecta - tions, clear financial reporting and preparedness for diligence will increase the likelihood of achieving a favourable outcome upon a sale. As 2025 progresses, the middle market’s combination of nimbleness, flex - ibility and growth potential makes it the most promis - ing ground for dealmakers seeking to capitalise on the next wave of M&A activity.
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