As we move through 2025, the mergers and acquisitions (M&A) landscape continues to evolve in response to economic, political, and financial forces. For owners of middle-market businesses in South Carolina and the broader Southeast, understanding these trends is key to timing your exit, maximizing valuation, and structuring deals that work in today’s market.
Nationally, deal activity has slowed compared to the record highs of 2021–2022. While billion-dollar headline deals still make news, middle-market transactions—typically involving companies valued between $5 million and $250 million—have dipped in volume. Much of this is driven by macroeconomic factors: elevated interest rates, persistent inflation, and uncertainty surrounding global trade and domestic policy.
Rising interest rates in particular have reshaped the dealmaking environment. The Federal Reserve’s prolonged rate-tightening cycle has increased the cost of capital, making it more expensive for buyers to finance acquisitions. This has put downward pressure on valuations in many sectors and forced both buyers and sellers to get more creative. Seller financing, earnouts, and equity rollovers have become common tools to bridge the valuation gap.
Despite these headwinds, South Carolina’s middle-market remains active. The state’s strong economic fundamentals—low unemployment, healthy GDP growth, and continued population inflows—make it attractive to both strategic buyers and private equity firms. In fact, recent regional deals in the engineering, home services, and light manufacturing sectors suggest that well-run businesses are still commanding solid interest, especially those with recurring revenue and scalable operations.
One trend shaping the national and regional M&A scene is the sheer amount of undeployed private equity capital. Over $1 trillion in “dry powder” is sitting on the sidelines, as firms wait for more favorable financing conditions or stabilized valuations. Once interest rates begin to ease—expected later in 2025—this capital could fuel a significant wave of acquisitions, particularly in the lower and middle market.
Locally, Charleston and the Lowcountry continue to see growth in industries like hospitality, construction, specialty retail, and logistics. These sectors are poised for consolidation as retiring business owners seek exit strategies and younger acquirers look to enter the market. Businesses with clean financials, strong management teams, and minimal owner dependence will be best positioned to benefit from these trends.
If you’re considering selling your business in the next 12–36 months, it’s essential to understand that deal structures are more nuanced than ever. In today’s environment, flexibility is just as valuable as a high purchase price. Sellers willing to offer partial financing or performance-based earnouts are often seeing faster closes and more buyer interest—especially when paired with clear documentation and forward-looking financials.
At VR Business Sales of Charleston, we’re tracking these trends closely and helping business owners across South Carolina prepare for what’s next. Whether you’re planning to sell now or a few years down the road, a proactive, well-informed approach to exit planning will ensure you’re ready when the right buyer comes along. Reach out today to schedule a confidential consultation and discuss how current market conditions impact your specific business.