Market Insights

Remember the COVID boom industries???As people hunkered down inside their homes, those previously long-ignored home improvements and repairs finally hit the priority list for consumers, much to the delight of those in the home goods and materials markets.??

An analogous dynamic seems to be happening now, but the context is continued high interest rates and low deal volumes, and those profoundly affected include the middle market and private equity.? With fewer transactions and the stifling cost of capital, businesses have shifted their efforts inward to improve performance and operating results.??This in part has manifested as increased or accelerated adoption of automation and productivity tools and initiatives targeting operating health.? In the lower middle market especially, these investments were typically deprioritized in favor of adding headcount.??The proverbial “throwing bodies at a problem” diminished as lenders and stakeholders pressed for more sophisticated and thoughtful solutions.??Plans to drive operating efficiency are now the combat weapons of choice against waning topline growth in those materially affected by current market conditions.?

Professional service firms with experienced operators who are equipped to not only see these opportunities but quickly implement cost-effective and contemporary solutions do quite well in this environment.??Those who lean toward overcomplicated, academic, and blue-sky recommendations while leaving the company to implement have become relics of the past who need to themselves adapt to stay relevant.?

Pacific Catapult sees heightened demand coming from businesses contemplating a transaction within 2 years, and less immediate need to directly support current deals.??We also see our Leadership practice shifting more toward fractional C-Suite demand over full-time interim or permanent placement, as more and more executives (particularly in regions with heavy tech concentration) struggle to find their next role.??Interestingly, demand for succession planning and the unique needs of the multi-generation family business - a strong focus for our firm - has been relatively consistent.

In summary, the recent emergence of the inward focus on operational health to create enterprise value in the middle market is a welcome phenomenon for elite operators, whose time it is to truly shine.?? Contact us to learn more about how our team can drive meaningful, rapid results for your business.