McHugh & Company

Middle Market Companies

People have varying opinions and perspectives about the size of a "middle market company". Our middle market clients generally have revenues from $10-200 million and are owned by:

Families (private)
Management teams (private)
Private Equity Funds (private)
Large multinational corporations (divisions of private/public companies)

Ownership Dynamics

Middle market companies often experience a challenging set of ownership dynamics that can impact the focus and outlook of the business:

Industry/Corporate Dynamics	Private Owner/Family Dynamics	Private Equity Fund Dynamics
a changing industry structure and competitive (foreign?) landscape new opportunities that require significant additional capital a corporate parent that wants to divest a corporate parent looking for markedly better results	age, succession illness boredom family conflict no heirs suitable to run the company a competent management team that could run the business, but cannot put together a deal to buy out the owners	time to cash out? platform company for more acquisitions unhappy with management's direction

Net Worth

This is much more than just a balance sheet term. There are numerous examples where the owners of private businesses had followed one of two paths:

Most of the shareholders' hard-earned assets were tied up in the company; aside from salary and bonus, the majority of their net worth was private company stock.
The owners stripped out as much cash as they could from company operations without severely limiting its ability to function. However, necessary investments needed to grow and/or stay competitive were deferred and the overall value was negatively impacted.

Combine one of these "net worth" conditions with any of the ownership dynamics noted above and turbulent situations can result. In these scenarios, skilled guidance and patience are required to implement growth initiatives or a transfer of ownership.