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Overview

The International Business Brokers Association (IBBA) and M&A Source recently released the results of their Market Pulse Q3 2025 Survey, providing comprehensive insights into market conditions for businesses sold on Main Street and in the Lower Middle Market. This quarterly survey is crucial for business intermediaries and owners as they navigate the complex terrain of business sales.

Key Findings

One of the most striking aspects of the Q3 2025 Survey is the generational divide among buyers and sellers in the market:

Generational Breakdown

The data indicates a significant presence of Baby Boomers in the market, comprising nearly 60% of business owners looking to sell their companies. Conversely, Generation X accounts for 27%, while Millennials and Generation Z collectively represent only 7% of sellers. This reveals a landscape where longstanding owners dominate, exiting after many years of business growth and development.

On the other hand, the buyer demographic skews much younger. Millennials and Gen Z are increasingly engaging in the acquisition process, making up 45% of search funders and 58% among serial entrepreneurs. Furthermore, nearly one-third of C-suite level buyers are under the age of 45, demonstrating a trend toward a younger buyer audience actively seeking to expand their portfolios.

Business Valuations

In terms of business valuation, the report suggests a steady outlook for smaller businesses (those valued under $1 million), with values remaining stable from quarter to quarter. For mid-market transactions, there was a modest uptick in valuations. Specifically, median multiples rose by 0.3 points for businesses valued between $1 million and $2 million and by 0.1 points for those within the $2-$5 million range. However, larger transactions valued between $5 million and $50 million saw a slight dip; nonetheless, they remained 0.8 points above the beginning of 2025, signaling consistency at the higher end of the market.

Leading Industries

Among the sectors attracting the most merger and acquisition (M&A) activity in Q3 2025, Personal Services and Construction stand out in the Main Street market. Meanwhile, Manufacturing and Construction led the way within the Lower Middle Market, showcasing sector resilience even amidst fluctuating economic conditions.

Survey Methodology

Conducted from October 1 to October 17, 2025, the Q3 Market Pulse Survey collected responses from 300 business brokers and M&A advisors, resulting in the completion of 247 transactions this quarter. This represents the 54th iteration of the Market Pulse Survey, a vital tool for understanding the marketplace dynamics.

Conclusion

With the changing demographics in ownership and clear trends in industry performance, the insights from the Market Pulse Survey serve as invaluable knowledge for business owners and intermediaries. As Millennials and Gen Z buyers continue to shape the future of the market, it will be interesting to watch how these trends evolve over the coming quarters.

About IBBA and M&A Source

The International Business Brokers Association, established in 1984 and home to nearly 3,000 members, is the largest nonprofit association for business brokers globally. They provide resources, education, networking opportunities, and certification programs for business brokers. Meanwhile, M&A Source focuses on lower middle market transactions, offering similar support to professionals in that domain.

For more information, contact the IBBA directly at IBBA Contact.