[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″ shape_divider_position=”bottom”][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][vc_column_text]While inflation and the possibility of an economic recession remain headline news, an argument can be made that with growing employment, decreased oil prices, and a continued rise in consumer spending, there is a light – albeit faint – at the end of the macroeconomic tunnel. In the lower middle market, however, the bright light remains unwavering with yet another quarter of robust deal flow.

Quarterly growth across sell-side projects was minimal in Q3, however the year-over-year increase was up more than 19.6% from the same period last year. Despite deal flow remaining fairly flat, there is the consideration that we came off of a record-breaking Q2 and fairly consistent growth over the past six quarters. Furthermore, the quality of newly-marketed deals in Q3 rose notably: the average revenue of deals marketed in Q3 was up $12M from last quarter, and the average EBITDA increased $1.5M.

Quarterly Deal Activity Summary

The above data are based strictly on deals >$250,000 in EBITDA, marketed by investment banks.

“The increasingly complex needs of today’s lower middle market businesses require unique and integrated approaches to solve challenges and drive consistent and superior outcomes that maximize value and create steady growth for our clients,” said Muhammad Azfar, Managing Partner of Auctus Capital Partners.

Auctus was named among the  Top 10 Investment Banks from Axial,  a private deal network serving professionals who own, advise, and invest in North American lower middle market companies, including more than 3,500 advisory firms and 2,000 corporate and financial buyers.

The 2022 Q3 rankings are based on Axial’s League Table that use surface data on investment banks to reveal their selectivity, relative attractiveness of their client’s businesses, and their overall sell-side process efficacy. Together, the Top 25 Investment Banks are those who work with the most in-demand clients; balance breadth, selectivity, and accuracy in the buyers they engage; and generate the largest number of positive outcomes for their clients. Axial’s Lower Middle Market Investment Banking League Tables aggregate and rank M&A advisors based on their quarterly deal activity. Three factors disproportionately drive league table ranking, including 1) Client quality [based on pursuits per deal], 2) Buy-side targeting [pursuit rate per deal] and 3) Deal outcome [down-funnel LOI and closure activity]. For detailed methodology, see the end of this feature.

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Top 25 Lower Middle Market Investment Banks [Q3 2022]

Axial | Kristina Mayne  |  October 2022

Axial is excited to release our Q3 2022 Lower Middle Market Investment Banking League Tables. See the full list of the Top 25 Investment Banks on Axial in 2022 Q3 here.

League Table Methodology

Unlike traditional league table structures that have remained the same for years, where firms are assessed against deal volume and deal dollar volume, Axial league tables surface data on investment banks that reveal their selectivity, the relative attractiveness of their client’s businesses, and their overall sell-side process efficacy.

The investment banks at the top of the Axial League Table are leaders across the following categories:

• Client Quality: Buy-side demand for engagements represented by the advisor.
• Buy-Side Targeting: The advisor’s ability to balance selectivity, accuracy, and breadth when identifying potential buyers.
• Process Effectiveness: The advisor’s ability to generate positive outcomes for their client.
• Overall Deal Relevance: How many buy-side mandates (financial and strategic) align with the advisor’s engagements.
• Process Selectivity: How broad or narrow are the advisors’ sell-side processes relative to their peers?
• Signed NDAs: How many buyers indicate interest in each of the advisor’s engagements, measured by the number of signed NDAs.
• Buyer Referrals: Feedback we receive from buyers regarding the manner in which the advisor manages their processes.
• Executed LOIs: How many deals the advisor successfully managed to take under LOI with an Axial buyer
• Closed Deals: How many deals has the advisor closed where they involved one or more Axial buyers in the process?

Together, the top 25 investment banks are those who work with the most in-demand clients; balance breadth, selectivity, and accuracy in the buyers they engage; and generate the largest number of positive outcomes for their clients.

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