#USA #Independence #IBBA #Market Pulse #MA Source

IBBA and MA Source Announce the Results of the Market Pulse Q4 2025 Survey

In a detailed report released on February 24, 2026, the International Business Brokers Association (IBBA) and MA Source revealed the findings from their fourth-quarter Market Pulse Survey for 2025. Conducted between January 1 and January 15, 2026, this survey involved 350 business brokers and M&A advisors, providing valuable insights into the current state of business sales in the Main Street (valued up to $2MM) and Lower Middle Market (valued from $2MM to $50MM).

Optimism in Market Conditions

The report highlights a significant optimism among intermediaries regarding market conditions as they enter 2026. Approximately 72% of participants believe that the market conditions will be either on par with the previous peak in 2021 (23%) or stronger (49%). This reflection of optimism indicates a robust sentiment among business brokers and advisors, suggesting an expected increase in transaction activity in the coming months.

Interestingly, more than half of the brokers surveyed (54%) anticipate an increase in deal volume over the next three months. Despite this optimistic outlook, pricing expectations remain cautious, with 71% of respondents believing that multiples will hold steady. The Lower Middle Market sector showed the greatest optimism regarding valuations, with about 26% of brokers predicting price increases.

Leading Industries in 2025

The survey identified several key industries that witnessed active transaction activity throughout 2025. Notable mentions include:

• - Personal Services: This category includes salons, spas, childcare services, and gyms, making it a reliable segment for Main Street transactions.
• - Restaurants: A consistent staple in the transaction landscape.
• - Construction: Dominating the Lower Middle Market, this sector is experiencing considerable roll-up activity.
• - Business Services: A prominent area of activity across both markets.
• - Manufacturing: While not among the top five for Main Street, it remains a strong player in the Lower Middle Market.

Buyer Trends and Acquisition Patterns

When analyzing the landscape of buyers in 2025, the survey found that individual buyers consistently dominated Main Street acquisitions, comprising 46% of the market. Serial entrepreneurs followed closely at 32%. This trend continued in the Lower Middle Market as well, where individual buyers accounted for 44% of acquisitions.
Interestingly, private equity firms participated in approximately one-fifth of these transactions, illustrating a steady interest from larger investment groups.

Market confidence, particularly among sellers, appears to be rising, with the Lower Middle Market strongly positioned as a seller’s market. This sentiment typically fosters favorable terms and higher valuations for sellers.

Deal Financing Dynamics

The financial dynamics in Q4 2025 revealed that sellers received a significant portion of their proceeds upfront, averaging between 76% to 89% cash at closing. This statistic indicates robust financial health for sellers, as they walk away with the majority of their deal value directly. Other financing mechanisms such as seller financing were employed to bridge valuation gaps, although earnouts and retained equity were less frequently seen.

Emily Bowler, Executive Director of the IBBA, emphasized that the 55th iteration of the Market Pulse Survey serves as a vital resource for business owners and their advisors to navigate the evolving market landscape effectively. She encourages stakeholders to follow the Market Pulse report quarterly to stay informed about emerging trends.

As the year progresses, these insights from the Market Pulse Survey will be crucial for anyone looking to engage in business transactions, whether as buyers, sellers, or advisors. Stay tuned for future updates, as the IBBA and MA Source continue to provide essential data for understanding the intricacies of the business selling environment.