Middle Market Business Transition Planning

In the middle market, major business transitions—such as the sale of a company, an intergenerational transfer, or CEO succession—happen with great frequency, even more than one might expect. Whether leaders are actively looking for these opportunities, or they are sprung upon them, the impact of this dynamism is significant. And, given the importance of middle market businesses to their local economies and to the U.S. economy overall, the success or failure of frequent transitions clearly matters on a grand scale.

In this report, the National Center for the Middle Market and its partners took a closer look at the specific types of major transitions in which middle market companies engage. We set out to understand how often companies experience transitions in ownership or governance: The sale of all or part of the company, an intrafamily transfer of control or leadership, a CEO succession, restructuring or bankruptcy, large new investment, or some other change that has a significant and lasting impact on how the company is financed, organized, and run. The study explored how middle market companies prepare for and execute business transition planning of this magnitude, and what challenges they face during the process. We found insights that apply widely to middle market transition, revealing practices that characterize the companies that handle these changes most successfully.