After a year of cautious deal-making, mid-market M&A is back. Interest-rate cuts, pent-up investor capital, and renewed optimism have reignited deal flow- especially among privately held firms in sectors like IT services, construction, and business contracting. Yet competition has intensified. Buyers are more selective, and sellers are expected to show institutional-grade readiness long before letters of intent arrive.
According to PitchBook, global mid-market M&A volume rose 18% in early 2025 as credit conditions improved. Deloitte’s CFO Signals survey reports that 58% of CFOs expect M&A activity to increase this year, but more than half say they feel “under-prepared” for a fast-moving deal environment.
“Winning in M&A isn’t luck- it’s preparation,” says Brian, CFO Worx CEO.
“The CFO who’s ready before the opportunity shows up controls the narrative, shortens diligence, and captures higher valuation.”
Why Mid-Market Companies Are at an Advantage
Despite limited resources compared to large corporates, mid-market companies often move faster and integrate more effectively post-deal. Their size allows for pragmatic decision-making and less bureaucracy but only if their financial house is in order.
Private equity funds and strategic acquirers alike now expect audit-ready financials, clean add-backs, and well-structured working-capital models before engaging seriously. CFOs who can deliver that transparency instantly become more credible partners.
A study from Grant Thornton found that mid-market firms entering diligence with accurate management accounts and documented controls saw time-to-close reduced by 25% on average.
Readiness Is the New Differentiator
In a competitive market, being “deal-ready” isn’t optional. It’s the factor that separates attractive targets from those that stall in diligence.
CFOs can strengthen readiness through four critical levers:
1. Clean financial data: Ensure GAAP-compliant accounting, reconciled balances, and documented policies. Inconsistent revenue recognition or one-off adjustments are red flags that can stall or kill a deal.
2. Normalized earnings and add-backs: Buyers scrutinize recurring vs. non-recurring items closely. Track add-backs proactively so you’re not scrambling to justify EBITDA adjustments under pressure.
3. Data-room discipline: Maintain a living data room with updated financials, KPIs, customer concentration metrics, and key contracts. A well-organized package accelerates diligence and signals control.
4. Forward visibility: Deals are priced on the future, not the past. Build three-year projections tied to operational drivers and working-capital assumptions that withstand scrutiny.
“When diligence teams ask for reports you can’t produce, you lose leverage immediately,” Brian notes.
“Preparation isn’t about perfection, it’s about credibility and speed.”
Storytelling That Drives Valuation
Beyond the numbers, narrative matters. Buyers pay premiums for clarity: how revenue is generated, how customers are retained, and how growth can be scaled. CFOs who connect financial performance to business strategy build trust quickly.
Strong financial storytelling includes:
- Demonstrating recurring or contracted revenue streams.
- Highlighting margin improvement through cost control or automation.
Presenting backlog and pipeline data that tie to forecasted cash flow.
According to PwC’s 2025 Deals Outlook, companies that articulate a clear, data-driven growth story achieve valuations 10–20% higher than peers with similar financial metrics but weaker narrative alignment.
Building Relationships Before You Need Them
Many CFOs wait until they’re ready to sell or acquire before speaking with investors or lenders. That’s a missed opportunity. Relationship capital- built through transparent conversations long before a transaction- is often what makes financing or valuation discussions smoother later.
Engage potential capital partners early by sharing high-level performance insights and strategic direction. A CFO who builds rapport and demonstrates operational discipline becomes a trusted partner rather than a transaction.
The CFO Worx Perspective
At CFO Worx, we see mid-market CFOs who outperform competitors by treating deal readiness as an ongoing discipline, not a last-minute scramble. They maintain investor-grade reporting, document add-backs monthly, and keep financial controls consistent across subsidiaries.
“Whether you’re buying or selling, readiness compounds,” Brian explains.
“It saves months of work, eliminates surprises, and lets you focus on negotiating value- not cleaning up data.”
Preparing for growth, a sale, or acquisition? CFO Worx provides M&A and CFO services to help mid-market companies build investor-ready financials, streamline diligence, and position confidently in a competitive deal environment.
Content Disclaimer: The information shared in CFO Worx Insights is for general informational purposes only and should not be considered professional, legal, accounting, or tax advice. Each company’s situation is unique, and readers should consult qualified advisors before making business or financial decisions.