Buy-Side Practice
2025 SECOND HALF SURPRISES
HVA Buy-Side Practice – Second Half Surprises
M&A Trends & Outlook:
The M&A landscape continues to defy easy predictions in Q2 2025. The consensus of surveys suggest Middle Market deal activity declined 10-15% YOY while total transaction value rose ~20% YOY given mega-deal emphasis1
Despite ongoing headwinds creating a sense of “wait and see”—including elongated deal timelines, variable asset quality, limited exit opportunities, persistent fundraising challenges, and tight credit markets there’s a palpable building of back-pressure. Rather than signaling a broader market stall, these trends suggest a return to fundamentals, with a heightened focus on deal quality, operational fit, and synergy alignment.
Backlogged demand and pent-up capital suggest that the second half of the year may bring renewed momentum particularly if macro signals (e.g., interest rate clarity and improved sponsor confidence) begin to align more decisively.
Our Client’s Buy-Side Mandates – Navigating the Chaos
Recent buy-side mandates reflect broader macro trends and HVA’s understanding of value creation across industry verticals. Each mandate is tailored to sector dynamics, yet all are anchored in driving long-term strategic value.
For example, our SaaS clients prioritize scale, growth, and retention core drivers of premium valuations even amid market caution. Professional Services mandates focus on talent, specialization, and cultural fit essential in people-centric models. With other Business Services models, clients are bridging trough earnings with a transaction structure ahead of an expected market turn sparked by interest rates and macro clarity
Integrating AI Into Every Aspect of the Buy-Side
Our Buy-Side team is harnessing alternative data and AI-driven tools to enhance how we source, execute, and deliver value for Private Equity and Corporate clients:
Map niche markets by analyzing owner motives and competitive dynamics
Faster outreach with precise targeting and enhanced M&A brand positioning
AI-driven sourcing enhances our ability to identify targets with high “propensity to transact”
Leverage HVA’s extensive experience to improve profiling and predict transaction signals
Rapid readouts on prioritized targets to aid PE and Corp clients develop offers and governance, including valuation assessments
Fast integration of latest industry data with internal assessments for informed decisions
HVA uses LLM insights for more personal owner connections, with AI integration underway to unlock more potential
Focused on finding genuine common ground
AI powers diligence by streamlining document review, extraction, and validation
Enables fast risk identification and remediation through internal and third-party collaboration
HVA Buy-Side – Industry Focus Areas
Vertical Insights in a Nuanced M&A Environment
Harbor View’s industry teams bring specialized expertise and real-time buy-side experience to help clients navigate a challenging yet opportunity-rich M&A market Despite persistent macro headwinds from rate uncertainty to valuation pressure our recent work across Industrials, Technology Services, and Financial Services points to pockets of strong activity driven by specific business model dynamics. Technology enablement, particularly AI and data, continues to play a catalytic role. By sharing insights across teams, we identify patterns and themes that sharpen strategy and uncover value others may overlook.
Industrials
Despite periods of uncertainty in the broader M&A environment, the Industrials space particularly within key subsegments has shown notable resilience. Private equity firms are doubling down on add-on strategies, increasingly targeting founder- and family-owned businesses, and actively competing for A-grade assets that remain in high demand.
2025 Outlook: Industrials M&A is expected to remain active, supported by ongoing infrastructure investment, improved financing conditions, and a renewed focus on digital enablement and operational readiness. While the market is increasingly selective, disciplined buyers with a quality-first approach are well-positioned to take advantage of strong deal flow and sector tailwinds
Technology Services
In the current environment, buyers in the Technology Services space are showing increased discipline, prioritizing targets with clear competitive differentiation, scalable delivery models, and strong commercial strategies. M&A activity continues to be driven by the integration of AI, advanced data capabilities, and vertical specialization particularly within IT Services.
2025 Outlook: We expect continued momentum, especially as PE firms pursue creative roll-up strategies most notably in the Managed Service Provider (MSP) segment aimed at building scalable platforms from smaller, founder-led businesses. Strategic buyers are focused on expanding technical capabilities, enhancing service delivery, and entering high-demand verticals facing complex digital transformation pressures, such as Financial Services and Healthcare MSPs and cybersecurity solution providers remain among the most active and attractive sub-sectors for both strategic and financial acquirers.
Financial Services
In Financial Services, acquirers are focused on expanding offerings to defend fee structures, positioning themselves as full-service solutions providers, and capitalizing on high client retention and organic growth. Strategic value lies in enhancing client experience while driving operational leverage.
2025 Outlook: While some short-term uncertainty remains, the broader trajectory points toward continued consolidation. Corporate buyers are pursuing acquisitions to scale operations, broaden capabilities, and strengthen competitive positioning. The Wealth Management space remains particularly active, with sustained interest from both strategic and financial acquirers seeking recurring revenue, loyal client bases, and growth through integration
Scorecard
Total US M&A Deal Activity by Quarter
M&A Spotlight on Two Sectors
Human Capital Management
–
1,299 acquisitions since October 1, 2022
32% of buyers made more than 1 acquisition in the last 30 months
Industrials
enable Shiftee to scale globally, refine its technology, and expand into new markets
Expected to strengthen Paycor’s upmarket position and combine with Paychex’s broad reach to form a comprehensive HCM offering
Expands AllStaff’s geographic footprint and strengthens their capabilities in industrial staffing
1,276 acquisitions since October 1, 2023
16% of PE-backed buyers made more than 1 acquisition
Case Study – Unlocking Value in a Crowded Market
PE Complex Claims RCM PortCo acquires niche RCM provider
Situation:
Our Private Equity (PE) client sought to execute an add-on acquisition for their portfolio company specializing in Workers Compensation Revenue Cycle Management (“RCM”) a complex and highly specialized segment of medical billing. After several months with another buy-side advisor, the search failed to generate actionable leads and momentum stalled.
Challenge:
Although the RCM market is fragmented, it has long been a consolidation focus for Private Equity investors— making it a highly competitive space for sourcing quality acquisitions Harbor view came on following an unproductive experience with a previous buy-side advisor, facing a market that had been extensively picked over, with few compelling opportunities remaining in an already narrow space. While the portfolio company had a strong CEO, his team was heavily focused on driving organic growth and had limited capacity or experience to execute an M&A process.
Outcome:
In close collaboration with portfolio company leadership and the PE backer, Harbor View reinvigorated the search by identifying new targets in the pre-defined niche work’ comp channel, and by expanding focus to adjacent niche markets; discovering a robust target universe of over 300 companies. Notably, our targeted outreach generated a healthy 31% response rate. Several high-potential acquisition candidates emerged, resulting in one closed transaction and multiple follow-on opportunities.
Perseverance was key as the target company was persuaded by its private sponsor to run a sell-side process. Harbor View’s consistent engagement and collaboration with our client uncovered differentiated insights while maintaining momentum to secure a winning position.
The result was a transformational combination that expanded the portfolio company’s total addressable market (TAM) with a new claim type and revenue stream, creating meaningful synergies and long-term strategic value.
Identified 300+ targets across RCM complex claims market universe
In Summary:
Harbor View was engaged by a U.S.-based PE client to reinvigorate a stale add-on acquisition strategy for their portfolio company in the already consolidated RCM space. Harbor View and our client team developed adjacent search areas, engaged an entrenched target that chose to go-to-market, ultimately persevering with a transformational closing Process Milestones
Activated a reluctant target; developed insights to differentiate our client’s offer
Collaborated with our client’s team at PE and PortCo to win the bid, despite a process, without chasing value
Transformational combination with instant synergies and expanded addressable market
HVA Buy-Side - Practice Overview
Our dedicated buy-side practice begins with a listen-first approach to establish objectives, create a market map, prioritize acquisition targets, and launch an initiative that results in high-impact outcomes
AVG RESPONSE RATE Platform Search Add-On Search
AVG RESPONSE RATE
INTRO CALL TO MEETING CONVERSION
INTRO CALL TO MEETING CONVERSION
Key Takeaways:
• Collaboration with our PE teams & their portfolio company leadership is the key to success
• There is no substitute for thorough research and market mapping
• Founders relate better to outreach from more senior bankers
Select HVA Buy-Side Engagements – Niche Markets
WEALTH & ASSET MANAGEMENT
INSURANCE ANALYTICS
ANNUITIES BROKERAGE
MORTGAGE SERVICES
SPECIALTY FINANCE
REVENUE CYCLE MANAGEMENT
INDUSTRIAL AUTOMATION
ENVIRONMENTAL SERVICES
ENVIRONMENTAL ENGINEERING
WASTE WATER / WASTE HAULING
JANITORIAL SERVICES FOOD EQUIPMENT DISTRIBUTION
MANAGEMENT CONSULTING
OUTSOURCED HR / PEO
STAFFING
OUTSOURCED S&M
MEDICAL BILLING
CLINICAL RESEARCH
DIGITAL TRANSFORMATION
SAP CONSULTING
DAAS
LMS / EMPLOYEE ENGAGEMENT
E-COMMERCE
POS HARDWARE REPAIR / SERVICES
CYBER SECURITY MANAGED SERVICE PROVIDER
B2B DISTRIBUTION BRANDED SNACKING
About Harbor View Advisors
The material in this report is for information purposes only and is not intended to be relied upon as financial, accounting, tax, legal or other professional advice. This report does not constitute and should not be construed as soliciting or offering any investment or other transaction, identifying securities for you to purchase or offer to purchase, or recommending the acquisition or disposition of any investment. Harbor View Advisors does not guarantee the accuracy or reliability of any data provided from third party resources. Although we endeavor to provide accurate information from third party sources, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.