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The headline read: “As Baby Boomers retire, Main Street could face a tsunami of change.”

The corresponding article summarized a much-discussed confluence of trends that many believed would fuel near-record buyout activity – namely, Baby Boomers’ offloading of assets and businesses in their transition to retirement.

That article (written by Andrew J Sherman) was published by CNBC at the end of 2019. While a historic buyout boom did, in fact, occur in late 2020 to early 2022, that dealmaking spree was not fueled by the retirement wave. In fact, many Boomer-owned businesses postponed exits and retirements during this stretch of heightened economic uncertainty.

But now, conditions might finally be ripe for a generational-fueled buyout boom. Baby Boomer owners are now increasingly less likely to postpone retirement as actual retirements continue to greatly outpace forecasts. Moreover, a recent survey of U.S. business owners found that 40% regretted not selling their business in the early 2020s and are actively planning for a transition or exit.

New research conducted by Strategex using PitchBook data shows how massive the opportunity may be:

  • Roughly ten million small businesses in the US employed an estimated 56.4 million workers in 2021, bringing in over $16.2 trillion in revenue.
  • An estimated 2.3 million of those businesses are run by Baby Boomers, who now range from 60 to 78 years old. In 2024, the average retirement age was 62.
  • An International Business Brokers Association survey in Q4 2023 shows retirement is now the biggest driver of small to midsize business sales.
  • Roughly 67% of owners of businesses valued between $5 million and $50 million still do not have a transition or exit plan.
  • Per the Exit Planning Institute, 60% of business owners surveyed in 2023 conducted a formal valuation and 15% indicated it was for a potential sale.
If only 15% of the estimated 2.3 million Baby-Boomer-owned businesses are potentially looking to come to market, based on previous aggregate revenue estimates, that could represent 345,000 businesses generating well over $500 billion in revenue.

Even if drawn out, such an array of prospective lower-middle-market dealmaking opportunities is the largest bonanza in years for PE fund managers and owners alike.

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