Why Independent Acquirers Deserve a Place in the Succession Planning Playbook

Business owners may be surprised to learn that individuals were the most active acquirers of businesses below $50 million in 2024. Strategic acquirers were a close second and private equity firms were the third most active acquirer of lower middle market businesses. Choosing the right buyer is one of the most consequential decisions owners face when it comes time to sell. What makes the individual acquirer attractive to sellers and why were individuals the most active small business acquirer in 2024? In this post we’ll take a deeper dive into the often-overlooked benefits of selling to an independent acquirer.

Independent Acquirers: Who Are They?

Independent acquirers are individuals, entrepreneurs or small investor groups looking to buy and operate a business. Unlike strategic buyers which are typically larger companies acquiring to grow market share, or private equity firms that are building portfolios of investments, independent acquirers are in most cases hands-on operators focused on a single business. They are buying to own, operate, and grow the business personally.

According to recently published survey data, independent acquirers made up the largest small business buyer category in 2024:

• 70% of deals below $2M were completed by individual buyers (including first-time acquirers and serial entrepreneurs).

• For businesses valued between $2M and $50M, individual buyers accounted for 43% of acquisitions, outpacing both strategic buyers and private equity firms.

In 2024, individual buyers accounted for 43% of transactions between $2M and $50M.

1. Alignment of Values and Long-Term Commitment

One of the most compelling reasons to sell to an independent buyer is alignment. These buyers are often attracted to your business because they see themselves carrying forward the operations as a key member of the team. Many sellers want to see their company culture and employees thrive post-sale. Independent acquirers tend to share this vision.

Strategic buyers, while often keeping operations intact, may absorb your business into a larger structure, erasing much of its unique identity. For private equity led transactions, sellers should be clear regarding the understanding of post-transaction operating plans and the amount of leverage the acquirer intends to introduce to the business.

2. Competitive Valuations and Cash at Close

Contrary to the perception that institutional buyers always pay more, independent buyers often offer highly competitive terms. Most individual buyers will pursue a change of control transaction, which means they target the purchase of the majority of seller equity. Generally, independent acquirers structure transitions such that the seller receives over 80% of total purchase consideration as cash at close. This demonstrates that even without the backing of large financial institutions, independent acquirers are both motivated and well-funded.

3. Smoother Negotiations and Personal Relationships

Deals with independent buyers tend to involve more direct, transparent negotiations. These buyers often work closely with sellers to understand operations and build trust. You’re not just another number in a portfolio—you’re the sole focus of their next chapter.

Compare this with private equity or strategic acquirers, where negotiations are often conducted through layers of attorneys, bankers, and corporate development teams. The personal touch is lost, and decision-making can be slow and inflexible.

4. Market Timing and Favorable Conditions

If you’re considering a sale in 2025, market timing could be on your side. Brokers and advisors surveyed by the International Business Brokers Association expect M&A activity to increase in 2025 due to declining interest rates and a more stable political climate. As market sentiment rebounds, activity among independent buyers is likely to tick higher, giving sellers the opportunity to seek partnerships among a strong pool of candidates.

5. Flexibility in Deal Structures

Independent acquirers often offer flexible deal structures. Whether you want to remain involved in an advisory role, exit entirely at close, retain an equity stake in the business, or fully exit after a transition period, individual acquirers are typically more open to creative structures that are aligned with your goals. This flexibility may contrast with the rigid frameworks often used by non-individual buyers.

6. Strong Post-Sale Outcomes

Perhaps one of the most underrated benefits is the strong post-sale outcome many business owners experience. Independent acquirers tend to invest time in understanding the business and maintaining existing staff and relationships.

This can lead to:

• Greater customer continuity

• Higher employee morale

• Maintaining and growing the brand built by the seller

This is especially relevant for owners retiring or seeking a smooth transition without drastic changes to the business.

When Might Private Equity or Strategic Buyers Be Better?

While independent acquirers offer many advantages, there are situations where private equity or strategic buyers make more sense:

• Private equity may be ideal if you’re seeking capital to grow, rather than to drive personal liquidity, or if you desire to remain with the business for a period of five or more years

• Strategic buyers might pay a premium for synergy and market access, especially in highly competitive or niche industries. But make sure you understand the implications on your team and customers.

  
  

These benefits often come with trade-offs like less flexibility, greater risk of employee turnover, and potentially significant operational changes.

Final Thoughts: Choose the Buyer That Aligns With Your Goals

Selling a business is both an emotional and financial decision. While the promise of high multiples and quick exits can be tempting, it’s crucial to align with a buyer who values what you’ve built.

Despite the lack of publicity, independent acquirers are a dominant force in small business M&A – and for good reason. They offer competitive pricing, strong alignment, and a personalized approach that institutional buyers often can’t match.

If you’re exploring the idea of selling your business in 2025, now is the time to consider an independent buyer – not just for the transaction, but for the long-term legacy of your company.

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