Despite growing uncertainty surrounding international trade policy and new tariffs introduced in early 2025, the mid-market mergers and acquisitions (M&A) sector in the U.S. continues to show notable resilience. While large-scale transactions have seen some slowdown due to regulatory and valuation concerns, middle-market deal flow has remained consistent. According to financial professionals involved in this space, smaller and mid-sized companies appear more agile in adjusting to changing economic conditions, allowing deals to proceed with fewer delays than those seen in the upper market tier.
One of the firms leading the charge in mid-market activity is Houlihan Lokey, which recently reported strong year-over-year growth in revenue and deal volume. For the fiscal year ending March 31, 2025, the firm posted a significant increase in earnings, driven by robust performance in both corporate finance and financial restructuring. Executives noted an expansion in staffing to meet growing demand, particularly in advisory services supporting distressed or transitioning businesses. This growth reflects not only increased transactional activity but also a broader shift toward firms seeking strategic guidance in an evolving economic landscape.
While some major financial institutions have expressed caution about deal-making in the current climate—particularly due to tariff-driven cost shifts and geopolitical instability—mid-market specialists maintain a more optimistic outlook. These transactions, typically ranging from $50 million to $500 million, often involve private companies less impacted by cross-border complexities. As a result, mid-market deals are able to move forward even as larger firms take a more conservative stance. Industry observers point to ongoing interest in sectors such as healthcare, industrial services, and niche technology as key drivers of sustained M&A momentum.
Looking ahead, analysts expect mid-cap deal activity to remain active, especially as companies look for targeted acquisitions to support growth, innovation, or operational consolidation. In parallel, restructuring and turnaround services are seeing renewed demand, particularly in industries still recovering from supply chain disruptions or interest rate pressures. Overall, while market risks persist, the M&A outlook in the mid-market space suggests that dealmakers are finding opportunities—even in a volatile environment—by focusing on flexibility, long-term value creation, and sector-specific dynamics.
