Middle-market companies, or those with between $10 million and $1 billion in annual revenue, are optimistic, growing and willing to make capital expenditures, say experts watching the segment.
“They definitely have their checkbooks out,” Roger Nanney, vice chairman of Deloitte LLP, told attendees of the Great Lakes ACG Capital Connection conference Tuesday at Nationwide Arena.
Nanney, responsible for the audit and consulting firm’s mid-market and privately held clients, served as a panelist alongside Michael Chirillo of GE Antares Capital and Tom Stewart, executive director of the National Center for the Middle Market, for the discussion, “Perspectives from the Mighty Middle Market.”
Amid the two-day gathering of buyers, sellers, lenders and other professionals, the discussion served as an introduction of sorts to the National Center for the Middle Market, which studies the segment from Ohio State University’s Fisher College of Business.
The investment community long has been a key audience for the center’s data and reports, which in all covers about 200,000 businesses and a third of total private employment.
So, what’s driving the success of midsized businesses?
“I don’t know, there’s one single answer,” Nanney said, but pointed to the emotional investment from executives of those companies – often family-owned or closely held – and their more agile structures and niche focuses, along with technology.
“They’re really beginning to spend on technology, the great equalizer. It allows them to take advantage of things only big companies could do in the past,” he said.
Despite the optimism, the middle-market businesses are characterized as unsung heroes of the U.S. economy, without much data or information other than that provided by the National Center for the Middle Market, Stewart said, unlike Germany’s celebrated Mittelstand.
“You don’t much hear about the middle market, that’s one of the reasons we’re here,” Stewart said. “This is where growth happens. And yet we’re not paying enough attention to these middle market companies.”