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The Bridge
UPDATES & INSIGHTS
FOR THE LOWER MIDDLE MARKET
A QUARTERLY PUBLICATION
OF THE M&A SOURCE
Chair’s Letter
How Great Exits Happen –
Ten Lessons Learned from
a Recent Utility-Services
Transaction
How Qualitative and
Macroeconomic
Factors Are Reshaping
Manufacturing Business
Valuations
»
»
»
NO.12
2 | The Bridge | Winter 2026
Updates + Insights
for the Lower Middle Market
The Bridge | Winter 2026 | 3
Content.
NO.12
ISSUE
WINTER 2026
The Bridge
A QUARTERLY PUBLICATION
OF THE M&A SOURCE
LETTER FROM THE CHAIR
Welcome the 2026 Board of Governors and
Leadership Team as we gear up for the year
ahead.
04
HOW QUALITATIVE AND
MACROECONOMIC FACTORS ARE
RESHAPING MANUFACTURING
BUSINESS VALUATIONS
In manufacturing M&A, financial
performance alone no longer tells the
valuation story.
08
HOW GREAT EXITS HAPPEN – TEN
LESSONS LEARNED FROM A RECENT
UTILITY-SERVICES TRANSACTION
Discover how preparation, process, and
disciplined execution create a strong exit.
12
4 | The Bridge | Winter 2026
Chair’s Letter
I’m grateful for the opportunity to serve as
Chair of M&A Source in 2026. After nearly ten
years as a member, M&A Source has played an
important role in my career and has also had
a meaningful personal impact. I care deeply
about the success of the organization and the
people who make up its community.
I joined M&A Source early in my career, initially
drawn by the educational programming. Over
time, I've come to realize the true value this
organization brings are the relationships you
create. This is an organization made up of
advisors and investors who understand the
realities of the lower middle market and are
willing to share their expertise, often candidly.
Committee
Conference
Credentialing
Marketing
Education
Podcast
Deal Market
Membership
Benefits
Sponsorship
2026 Leadership Team
2026 Board of Governors
Jaclyn Ring
Chair of the Board
Kathlene Thiel
Immediate Past Chair
Tawnya Gilreath
Chair Elect / Education
Chair
Amy Cole
Governor / Treasurer
Laura Ward
Governor / Secretary
Russell Cohen
Governor / Membership
Chair
Dean McDonald
Governor / Benefits
Chair
Rich Jones
Governor
Joel Pokorney
Governor
Robert Margeton
Governor / Deal
Market Chair
Scott Bushkie
Governor / Past
Chairman
Jeff Snell
Governor /
Credentialing Chair
Kyle Madden
Governor
Jim Parker
Governor / IBBA Chair
That openness and collaborative spirit is what
sets M&A Source apart from other organizations.
I’ve been fortunate to serve in several roles,
including Sponsorship Chair and most recently
Conference Planning Chair. Those experiences
gave me a true appreciation for how much work
happens behind the scenes and how dependent
the organization is on members who are willing
to contribute their time and perspective. M&A
Source functions as well as it does because
of our dedicated Board of Governors and
Leadership Team. I am thankful for their
commitment, and I am looking forward to working
alongside this thoughtful and experienced group.
Chair
Robert Latham
Jeff Snell
Carey Sobel
Tawnya Gilreath &
Bob McCormack
David Dejewski
Rob Margeton
Russell Cohen
Dean McDonald
Todd Torquato
Jaclyn Ring
2026 Chair, M&A Source
Dear Friends and Colleagues,
The Bridge | Winter 2026 | 5
As Chair, my focus is on continuity, ensuring M&A Source
remains a place where meaningful connections are made
and lower middle market deals happen, while also being
thoughtful about how we continue to serve members in a
changing market.
I appreciate the trust placed in me, the 2026 Board, and
the 2026 Leadership Team, as well as the many members
who contribute in ways that don’t always receive public
recognition. I look forward to the year ahead and seeing
what strides we make together.
Driving deals. Strengthening connections. Shaping the
lower middle market.
Jaclyn Ring
M&AMI, CM&AP
This is an organization
made up of advisors
and investors who
understand the
realities of the lower
middle market and
are willing to share
their expertise, often
candidly. That openness
and collaborative
spirit is what sets M&A
Source apart from other
organizations.
6 | The Bridge | Winter 2026
The Bridge | Winter 2026 | 7
The Bridge | Winter 2025 | 7
The Q4 2025 Market Pulse Survey
is open through January 15
Learn more and participate to gain access
to exclusive participant benefits.
GET STARTED
‹$500K
$500K-$1M
$1M-$2M
MARKET SEGMENTS STUDIED
MAIN STREET
LOWER MIDDLE MARKET
Q3 2025 Highlights
SELLERS BY GENERATION
Silent
Baby Boomers
GenX
Millennials
GenZ
59%
27%
6%
1%
7%
"We’re starting to see generational differences affect how deals unfold. Buyers in
their 30s and 40s may be more metrics-driven and acquisition-oriented, while long-
time owners tend to value relationships and legacy. As advisors, we often end up
translating between those priorities."
— Brian Stephens, Intermediary, Legacy Venture Group
68%
90%
Seller’s Market Sentiment Q3 2012-2025
SELLER’S MARKET CONFIDENCE
$2M-$5M
$5M-$50M
8 | The Bridge | Winter 2026
Beyond the Numbers: How Qualitative and
Macroeconomic Factors Are Reshaping
Manufacturing Business Valuations
WHEN BUSINESS OWNERS THINK ABOUT VALUATION, THE CONVERSATION OFTEN BEGINS AND ENDS
WITH FINANCIAL PERFORMANCE: REVENUE GROWTH, EBITDA MARGINS, AND TRAILING TWELVE-
MONTH RESULTS. WHILE THOSE METRICS REMAIN FOUNDATIONAL, SOPHISTICATED BUYERS IN
TODAY’S M&A MARKETPLACE INCREASING WEIGHT ON QUALITATIVE AND MACROECONOMIC
FACTORS THAT INFLUENCE RISK, RESILIENCE, AND SCALABILITY.
By Nick Fares
CBI, CM&AP, M&AMI, SUMMIT CAPITAL ADVISORS AND NEO BUSINESS ADVISORS
The Bridge | Winter 2026 | 9
This shift has become especially pronounced in
manufacturing and industrial businesses as global supply
chains, tariff policy, labor availability, and capital intensity
collide in real time.
In my work advising lower-middle-market manufacturing
companies, and as explored in American-Made Millions:
How to Unlock the True Value of Your Manufacturing
Business Before Selling, I consistently see the same pattern:
businesses that proactively address qualitative risk factors
and macro exposure not only perform better operationally,
but also command materially higher valuation multiples at
exit.
The Manufacturing Valuation Lens Is Different
Manufacturing and industrial businesses are valued through a
different lens than asset-light service companies or tech firms.
Buyers look beyond earnings to understand:
• Fixed asset intensity and replacement CapEx
• Supplier reliability and material availability
• Workforce skill depth and labor concentration
• Customer stickiness and switching costs
• Process documentation and operational maturity
These factors directly affect perceived durability of cash flow,
which in turn drives valuation multiples.
A company generating $3 million of EBITDA with operational
fragility may trade at a lower multiple than a $2.5 million
EBITDA business that demonstrates resilience, scalability, and
institutional quality.
Tariffs as a Real-World Stress Test
Recent tariff volatility has exposed both strengths and
weaknesses across the industrial landscape.
For some businesses, tariffs have been a headwind.
Companies reliant on foreign raw materials or overseas
component suppliers have seen margin compression, longer
lead times, and pricing pressure. In certain cases, they have
lost customers entirely due to cost pass-through or supply
disruption.
For others, tariffs have functioned as an unexpected
competitive advantage.
I am currently advising a business in the refractory ceramic
fiber space that sources exclusively from domestic suppliers
and has long positioned itself as a premium solution provider.
Historically, the company competed against lower-priced
alternatives using imported materials. Tariffs effectively
eliminated that pricing arbitrage. Competitors either raised
prices to uneconomic levels or were forced to shift to
domestic suppliers without established vendor relationships
or volume pricing. The result was a meaningful gain in market
share for the premium domestic supplier.
From a valuation standpoint, buyers view this type of tariff
resilience as a structural advantage, not a temporary windfall.
Supply Chain Resilience as a Value Driver
In today’s market, supplier concentration and geographic
exposure are no longer footnotes in diligence. They are front-
and-center valuation drivers.
Buyers increasingly scrutinize:
• Domestic vs. international sourcing mix
• Supplier concentration by spend
• Long-term contracts and pricing mechanisms
• Redundancy for mission-critical materials
Businesses with diversified, reliable supply chains are viewed
as lower risk, even if their input costs are slightly higher.
Conversely, heavy reliance on a single overseas supplier may
result in purchase price adjustments, earnouts, or multiple
compression.
The same applies on the customer side. Businesses shipping
heavily into Canada or Mexico have experienced tariff-related
demand disruptions, currency volatility, and administrative
complexity. Those with a diversified end-market mix are better
insulated and therefore more attractive to buyers.
Asset Intensity and Capital Discipline
Manufacturing businesses often require ongoing capital
investment to remain competitive. Buyers want clarity and
predictability around CapEx.
Key questions include:
• Are machines well-maintained or end-of-life?
• Is CapEx reactive or planned?
• Does growth require disproportionate capital?
10 | The Bridge | Winter 2026
A disciplined CapEx strategy, supported by historical data and
forward planning, signals operational maturity. This reduces
perceived risk and supports higher valuation multiples.
Labor, Leadership, and Organizational Depth
Skilled labor shortages continue to challenge manufacturing
companies nationwide. Buyers evaluate not just headcount,
but organizational resiliency.
Common red flags include:
• Overreliance on a small number of key employees
• Flat organizational structures with no bench strength
• Tribal knowledge held by owners or senior operators
Businesses that invest in training, cross-functional knowledge,
and second-tier leadership are easier to transition and scale.
That directly improves buyer confidence and valuation
outcomes.
Process Documentation and Institutional Readiness
Undocumented processes are one of the most common value
leaks in manufacturing M&A.
Buyers discount businesses where:
• Quoting and pricing logic lives in someone’s head
• Quality systems are informal or inconsistent
• Operational procedures are undocumented
Conversely, companies that invest in documentation, standard
operating procedures, and systems integration appear
institutional, even at modest revenue levels. This perception
alone can meaningfully impact valuation multiples.
Preparing for Sale Is About De-Risking
Ultimately, valuation is a function of risk. Financial performance
sets the baseline, but qualitative and macroeconomic factors
determine how buyers price uncertainty.
Tariffs, supply chain disruptions, labor challenges, and
geopolitical volatility are not temporary anomalies. They are
the new operating environment. Businesses that acknowledge
this reality and adapt accordingly are rewarded with stronger
performance today and higher valuations tomorrow.
For owners contemplating an eventual exit, the takeaway is
clear: preparation is not about cosmetic cleanup in the final
year. It is about systematically strengthening the business long
before a sale process begins.
Those who do so unlock not just better valuations, but better
businesses.
Nick Fares
CBI, CM&AP, M&AMI
Financial performance
sets the baseline,
but qualitative and
macroeconomic factors
determine how buyers
price uncertainty.
The Bridge | Winter 2026 | 11
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an unparalleled introduction to the fundamentals of M&A.
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12 | The Bridge | Winter 2026
EVERY NOW AND THEN, A FOUNDER-LED COMPANY REACHES THE MOMENT WHEN YEARS OF WORK
INTERSECT WITH THE RIGHT STRATEGIC PARTNER. OUR RECENT SALE OF A RESPECTED UTILITY-
SERVICES AND CONSTRUCTION-MANAGEMENT FIRM WAS ONE OF THOSE MOMENTS — AND A
POWERFUL REMINDER OF WHAT TRULY DRIVES PREMIUM OUTCOMES IN TODAY’S M&A MARKET. WITH
THIS TRANSACTION, OUR CLOSE RATE AT KINECTED HAS NOW CLIMBED TO 88%, REINFORCING HOW
MUCH PREPARATION AND PROCESS MATTER FOR OWNERS.
How Great Exits Happen: Ten Lessons
Learned from a Recent Utility-Services
Transaction
By Kevin Berson
CM&AP, M&AMI, KINECTED ADVISORS
The Bridge | Winter 2026 | 13
Beyond the headline valuation, several lessons stood out —
lessons that apply to any founder considering an eventual
transition.
1. Early alignment on goals prevents drift
Before advisors are hired or conversations begin, owners
need clarity on four things: valuation expectations, timing,
rollover appetite, and post-close involvement. In this case,
the leadership team had already aligned internally, which
kept negotiations on track when discussions tightened. Deals
wander when owners aren’t sure what they want.
2. Strong financial preparation accelerates the deal
Buyers don’t demand perfection, but they do expect
consistency and defensibility. Early on, it was clear the
company needed a more sophisticated financial function to
handle the intensity of diligence. We pushed for the addition
of a seasoned fractional CFO, and the difference was night
and day. With the help of this CFO, several foundational
processes were implemented:
• Predictable monthly close
• Bottom-up forecast model
• Detailed and probability-weighted pipeline
• Clean and consistent COGS treatment
• Supportable, defensible adjustments to EBITDA
• Tracking of key metrics such as utilization, win rates, and
average billing rates
Having this level of precision gave buyers confidence and
were essential to achieving a premium multiple.
3. A well-run M&A process is the ultimate value lever
Competition drives premium outcomes. Our structured
process targeting 200 potential strategic and Private Equity
buyers. From this field, we received 60 signed NDAs and 10
solid offers, the majority well above the owners’ expectations.
Whether a company is worth $10 million or $100 million, the
process is what creates leverage.
4. Customer concentration can be reframed as a strength
Many utility-facing companies, especially those based in
California, have concentrated revenue. Buyers know this. The
key is reframing it from “risk” to “penetration opportunity.”
This company had clear share-of-wallet expansion potential,
multi-year visibility, multi-year agreements (MSAs), strong
win rates, multi-threaded client relationships, and an excellent
renewal history. Handled correctly, concentration becomes
part of the overall narrative — not a discount mechanism.
5. Prepared management meetings move valuations
upward
Buyers pay premiums when leadership shows up organized,
thoughtful, and ready with data. The team articulated its
growth narrative clearly and responded with precision. When
confidence goes up, valuations often do too.
6. Cultural alignment isn’t “soft” — it’s strategic
Cultural fit between the company and the eventual acquirer
was evident early. When alignment is strong, diligence moves
faster, trust builds, and deal fatigue drops. Culture may not
show up in a spreadsheet, but it’s often the hidden lubricant
that keeps a deal moving. You will need lean on this trust to
get through the peaks and valleys of the deal lifecycle.
7. Leadership availability
during diligence keeps momentum
Responsiveness matters. This leadership team stayed fully
engaged while continuing to run day-to-day operations. Their
availability reduced misunderstandings, prevented re-trades,
and reinforced confidence. Unavailability, by contrast, is one
of the most common momentum killers.
8. Advisor coordination prevents last-minute surprises
M&A is a team sport. Clear communication between legal,
financial, tax, and advisory partners kept diligence smooth
and issues contained. Internally, having a steady hand guiding
the process kept everyone aligned through the final stretch.
Great exits are rarely
the result of a single
negotiation or a hot
market moment.
14 | The Bridge | Winter 2026
9. Earn-out clarity is non-negotiable
Earn-outs are fertile ground for disputes if definitions and
mechanics aren’t nailed down. We negotiated a clean deal
structure with a bonus if certain 2026 deal targets were met.
We tightened language and provided illustrative examples
early so both sides would be aligned long before any
contingent payments come into play.
10. Managing fatigue is part of the job
Even disciplined owners get tired as closing approaches.
Keeping the team focused on immediate milestones — not
the entire mountain — helped maintain momentum and clarity
through the finish line.
Great exits are rarely the result of a single negotiation or a
hot market moment. They’re the cumulative outcome of years
of decisions — around financial discipline, leadership depth,
narrative clarity, and the willingness to run a real process
rather than hope for a lucky inbound call.
This transaction reinforced something many of us in the
industry already know but don’t always see executed well:
preparation compounds. When owners align early, invest
in infrastructure before they have to, and treat culture and
credibility as strategic assets, outcomes tend to take care of
themselves.
For founders, operators, and advisors alike, the takeaway is
simple but not easy: premium results are built long before
a deal is on the table. The work done upstream determines
whether a transaction feels reactive and exhausting — or
controlled, competitive, and ultimately successful.
Sharing these lessons in the spirit of learning and
comparison. Every deal is different, but the patterns behind
great exits are remarkably consistent.
Kevin Berson
CM&AP, M&AMI, Kinected Advisors
Certified M&A Professional
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The Bridge | Winter 2026 | 15
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