[Kirk Samson]

Several commentators in the U.S. have noted that giants such as Blackrock have acquired so many assets that they are running out of interesting projects in which to invest. In addition, the sheer immensity of some of these organizations has arguable made it so that they are inflating markets by overspending to get the remaining key assets into their portfolios. For small and medium-sized companies in the U.S., it can extremely challenging to compete with companies that have been bought out and infused with cash by PE backing. Will this result in a market in which there really isn’t anything left in which to invest? if so, how will this impact the M&A environment?

[Miguel Cortijo Antona]

Hi Hirk, thanks for your post. I belive that while capital concentration among large asset managers and PE funds does create valuation pressure, it does not mean there will be “nothing left to invest in.” From my view, it is instead likely to reshape the M&A environment. Competition will push large investors toward platform builds, carve‑outs, and operational value creation rather than pure asset accumulation. For SMEs, this raises entry barriers, but it also increases opportunities for strategic partnerships and exits, while driving innovation and M&A activity into underserved niches and emerging sectors.

[Judith Ghitea]

Hi Kirk and Miguel,

As someone who works with primarily SMB sellers and happen to be employed by a PE-backed organization very active in M&A, this an interesting topic. We are relatively small ourselves, so we’re nowhere near running out of acquisition targets nor are we purposefully overpaying.

There are sectors of the market though where even we are seeing inflated, almost silly amounts being paid for organizations that don’t seem that appealing. The ‘why’ is complex and often a mystery until well into the future when we see what, if anything, the buyer did with the organization. Were they trying to beat a specific competitor? Are the metrics they’re being measured by based on purchase price instead of future performance? Did they really just like the seller? So many questions.

I love the pointer to underserved niches and emerging sectors as alternate ways to seek growth. Part of our M&A approach now is definitely creative sourcing. As the barriers change, our targeting approach has to change, too. For example, we have found that our partner program that was established 10-15 years ago remains very interesting to smaller businesses and has provided us with a great pipeline for acquisition. It does mean that we end up with multiple smaller deals in the place of a single larger one, but we have an existing relationship to back our value proposition.

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