Lower-middle-market M&A in South Texas.
How mergers and acquisitions work for South Texas companies with roughly $1M to $5M of earnings: buyers, process, valuation, and when you need an M&A advisor instead of a Main Street broker.
Lower-middle-market M&A covers companies with roughly $1 million to $5 million of EBITDA, larger than Main Street businesses but smaller than the deals Wall Street banks pursue. In South Texas these are often distribution, logistics, construction, healthcare, home services, and manufacturing companies. Sales at this size usually run as a structured, confidential auction to private equity firms, family offices, strategic acquirers, and well-funded individual buyers, priced on a multiple of EBITDA.
Who buys South Texas companies at this size
Private equity platforms building regional roll-ups in home services, landscaping, HVAC, logistics, and healthcare. Family offices and independent sponsors who want durable Texas cash flow. Strategic acquirers, often competitors from San Antonio, Houston, or out of state, buying their way into the Valley. And cross-border buyers from Monterrey, Reynosa, and Matamoros for whom an established U.S. company is worth more than a startup. See selling to cross-border buyers.
How the process differs from a Main Street sale
Larger deals use a confidential information memorandum, a short list of targeted buyers rather than public listings, indications of interest followed by a letter of intent, and a heavier diligence phase that often includes a quality-of-earnings review. Deal structure matters more: rollover equity, earnouts, working-capital targets, and representations and warranties all affect what you actually take home. See seller financing and earnouts and asset vs. stock sales.
Valuation at this size
Buyers price on adjusted EBITDA rather than SDE, and multiples rise with size, recurring revenue, customer diversification, and a management team that stays. A company that crosses from owner-dependent to manager-run can see its multiple move meaningfully, which is why the two years before a sale are often the most valuable to plan.
How Delta runs lower-middle-market mandates
Delta pairs local relationships across the Rio Grande Valley with institutional process: underwriting on our Underridge platform, a securities attorney who spent more than 15 years at the SEC, FINRA, and FDIC, a private-equity CFO for quality-of-earnings preparation, and outreach to private equity, family offices, and Northern Mexico in English and Spanish. Start with a confidential valuation or talk to a partner.