Patrick Hurley

Is 2026 an open M&A window—or are we closer to the edge than most owners realize? In my experience advising lower middle market owners over the past 25+ years, exit timing is rarely derailed by something inside the business. It’s usually something outside of it. I’ve seen a trucking company owner in 2005 delay going to market while debating valuation expectations—only to have Hurricane Katrina disrupt his oil & gas–related customer base and stall buyer appetite in his sector. I’ve seen owners in late 2007 decide to “wait one more year” for better numbers, only to have the financial crisis in September 2008 freeze capital markets and push their exit timelines out 2–3 years. And in each cycle—whether driven by credit markets, geopolitical instability, regulatory shifts, or sector-specific shocks—the pattern is the same: Windows close faster than owners expect. Here’s the strategic question for 2026: Are we in a “harvest window” or a “hold and hope” period? What I’m seeing in the lower end of the middle market today: - Capital is available—but selective. - Private equity dry powder remains significant, but underwriting standards are tighter. Buyers are rewarding recurring revenue, customer diversification, and strong second-tier management. Average companies are getting average outcomes. Exceptional companies are still commanding premium valuations. - Debt markets are functioning—but disciplined. - Senior lenders are back, but leverage levels are more conservative than the pre-2008 or pre-2022 periods. That impacts structure—more equity, more scrutiny, and in some cases, more earnouts. - Geopolitical and policy uncertainty is elevated. Election cycles, global conflicts, supply chain realignment, and regulatory shifts create unpredictability. None of this stops deals—but it can pause markets abruptly. Demographics are not on your side. A significant percentage of privately held businesses in the $3M–$50M revenue range are owned by founders in their late 50s to early 70s. When too many quality companies come to market simultaneously, buyer selectivity increases and valuation pressure follows. You don’t control macro timing—but you do control readiness. If 2026 represents a reasonably stable capital environment with active buyers, the real question isn’t “Is this the absolute peak?” It's: If the window narrows in 18–24 months, will I regret not having acted? The bottom line: markets rarely send engraved invitations before they shift. If your company is performing well, your management team is stable, and your industry fundamentals are intact, earlier is often strategically safer than later. If you’re thinking about your exit sometime between now and the next five years, this is the moment to pressure-test your assumptions. Want to discuss whether 2026 is a window you should be acting in—or preparing to exit through? Reach out or send me a message. #ExitPlanning #SellingYourBusiness #MergersAndAcquisitions #BusinessValuation

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I had the pleasure of attending the NACD New England Chapter event on September 17 in Boston, “Leading Minds of Governance & Tech” for Board members. A big thank you to Ellen Richstone and the organizers for putting together such an insightful event. The CEO panel featured incredible perspectives from CEOs like Tamara Lundgren from Radius Recycling, Sean Keohane from Cabot Corporation, Greg Smith from Teradyne, and Gary Cohen from iRobot. The discussions were rich and thought-provoking. Corporations must be nimble and think long term but be prepared to react promptly in a high frequency environment. Routine jobs are at risk. People are excited about Ai to replace someone else’s job.  Discussion of "New Collar jobs". As manufacturing jobs try to make a comeback in the US, many of them are going to be New Collar Jobs instead of the traditional blue-collar jobs. US companies will have to be competitive with their cost structure, so the New Collar Jobs will be created in reimagined manufacturing settings.  New-collar jobs will require advanced technical and soft skills for emerging tech fields like AI, cloud computing, and data science, but do not always necessitate a four-year degree. These roles combine the hands-on approach of blue-collar work with the higher earning potential and stability of white-collar jobs, emphasizing practical training, apprenticeships, certifications, and continuous upskilling rather than traditional degrees. The concept of new collar jobs, mentioned by the panel, was coined by former IBM CEO Ginni Rometty, based on the rise of new technologies like AI, cloud computing, and data science, which create jobs demanding different skill sets.  There was another great panel discussion moderated by Ellen Richstone on the Governance Expert Panel consisting of Robyn Bew  Richard J. Bannister, Jr. Elyssa (Emsellem) Kutner and Matt Talcoff  Key takeaways from the panel – is your company ready for new international trade; Boards need to be agile to manage the human capital and technology tradeoff. Boards should be prepared to consider more scenarios (short and longer term) to manage their risks. Many institutional investors are getting quiet about what they expect from companies especially in the context of ESG. The 2026 proxy season will be quite different  Also a great discussion between Rich Lesser from Boston Consulting Group (BCG) and Richard Fields from Russell Reynolds Associates. Boards should be factoring Ai, geopolitics and resilience in their discussions.  The world is evolving from “Just in Time” to “Just in Case” Four steps for resilience: prepare, absorb, adapt and reimagine.  Deborah Rosenthal Larissa Ravetto Jim Dodge Sharon Rossi Bryan McCorry Ozge Kurtoglu  #Governance #TechLeadership #NewCollarJobs #AI #BoardMembers #CorporateAgility #ESG #Resilience #ContinuousLearning https://lnkd.in/eQhYT6vd

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Successful business owners contemplating retirement likely recognize the importance of having a plan - for the business and the owners themselves. Peapack Private shared some planning tips at recent NY event (article link in comments). #exitplanning #beprepared #maximizevalue

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First, buyout managers should invest with operational #valuecreation at the forefront. This means that in addition to strategic diligence, they should conduct operational diligence for new assets. #privateequity https://ow.ly/iitI50VUpwg

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Given First Industrial’s continued refusal to address its governance discount, Land & Buildings is voting against long-tenured directors Dominski and Hackett. Matt Dominski has been on the board for 16 years and simultaneously served as Lead Independent Director of CBL & Associates while it marched into Chapter 11 bankruptcy. That's the judgment leading FR's board, in our view. (NYSE:FR) could unlock $15/share in value, over 20% upside, with a refreshed board and enhanced capital allocation but instead is entrenching itself, ignoring shareholders, and boosting executive pay. L&B has a position in FR.   Press Release: https://lnkd.in/edwyZMmy   SEC Legend: https://lnkd.in/eQFt7UiS

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The Private Equity Playbook: Unlocking Hidden Value in Traditional Companies During a recent board meeting, a third-generation manufacturing CEO posed a thought-provoking question: "What would a private equity firm do with our business that we haven't considered?" This inquiry encapsulates a growing realization across industries: the private equity approach to value creation offers lessons far beyond financial engineering. Three Core Principles of Exceptional Performance 1. Architecting Value Creation Private equity firms don't leave value to chance. They: - Develop detailed value creation plans - Implement 100-day action items - Conduct frequent operational reviews - Focus on leading indicators, not just lagging results 2. Strategic Resource Allocation The private equity mindset excels at: - Prioritizing great opportunities over good ones - Reallocating resources from maintenance to competitive advantage - Investing heavily in transformative initiatives 3. Leveraging External Perspective Private equity brings fresh insights by: - Challenging long-held assumptions - Applying cross-industry pattern recognition - Uncovering opportunities hidden in plain sight Bridging the Implementation Gap Understanding these principles is just the first step. Successful implementation requires: - Building internal capabilities mirroring private equity's operational discipline - Investing in robust data infrastructure - Developing change management expertise - Creating accountability mechanisms for consistent execution The Path Forward The private equity playbook isn't a secret formula—it's a systematic approach to value creation accessible to any company willing to embrace the necessary discipline. The question for traditional businesses isn't whether they could benefit from these principles, but whether they're prepared to consistently apply the rigor required for transformative results. As companies across sectors wake up to the power of operational excellence beyond cost-cutting, the lessons from private equity offer a roadmap to reimagining how value is created, captured, and multiplied. The journey begins with a simple question: Are you ready to see your business through the lens of untapped potential?

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The Bourne Partners team recently attended the FDA Compounding Quality Center of Excellence Conference. The Conference included discussion on a range of top-of-mind issues related to the 503B space, including drug shortages, quality, public perception, and reimbursement, among others. Our own Carson Riley, Managing Director, also participated in a panel, providing his expertise on the space. Here are a few of our takeaways:   1) Drug shortages continue to be a challenge for hospitals/health systems. Yet, many 503B outsourcing facilities abstain from participating in drug shortage work due to regulatory restrictions around selling a product in shortage once it is compounded. There were multiple calls to regulators to continue to work with outsourcing facilities to ease some of these restrictions in order to allow 503Bs to better support hospitals and health systems when drugs are in short supply.   2) Conversations on quality and regulatory compliance were ubiquitous throughout the Conference. In our view, there continues to be unanswered questions with respect to nuanced elements of 503B regulations given the unique role that 503Bs play in the Pharma supply chain. Dozens of 503Bs currently have some sort of regulatory issue (e.g., Form 483s, warning letters, etc.). The U.S. Food and Drug Administration (FDA) emphasized the need to follow existing guidelines stringently, but operators were hopeful to see certain nuances addressed in the near future.   3) In our view, 503Bs play a critical role in the U.S. Pharma supply chain. However, there is a public narrative around quality issues and the use of allegedly unsafe/compounded GLP-1 drugs. In our view, there needs to be a collaborative effort by regulators, operators, and investors alike to educate the public on the value that 503Bs provide within the U.S. healthcare ecosystem since public perception is critical to the sector’s long-term success.   4) Reimbursement for 503B products was a part of multiple discussions as inconsistent reimbursement can lead to lower utilization / availability of 503B products. Without utilization of 503B products, the benefits of working with an outsourcing facility cannot be fully reaped within the healthcare system. This is especially an issue when 503B products are dispensed through the hospital pharmacy and given in an outpatient setting (where insurance reimbursement for these treatments is the most limited).   To discuss further, please reach out to our Pharma investment banking team, led by Carson Riley (criley@bourne-partners.com).

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Financial growth in franchising isn’t about chasing the fastest path to capital. It’s about disciplined investment; in unit-level economics, system-wide infrastructure, and long-term scalability. Across today’s M&A landscape, deal counts may be down, but values are up - a clear signal that investors are rewarding high-quality, well-prepared businesses. In my latest article for Franchising World (Sept/Oct issue), I explore what truly separates successful franchise operators from those who struggle and how franchisees can build sustainable wealth through discipline, cash flow management, and strategic scaling. 🔗 Read the full article here: https://lnkd.in/eqC4aCR6 #FranchiseFinance #FranchiseGrowth #PrivateEquity #InvestmentBanking #Leadership #WealthBuilding #Franchising

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CoStar Faces Activist Pressure as Third Point Seeks Board Overhaul Over Homes.com Losses "Third Point, which manages $24 billion in assets, sent a letter to CoStar's ( CSGP ) board accusing management and directors of misaligned incentives, poor governance and billions of dollars in misallocated capital tied to the company's Homes.com business. "The firm called on the board to replace most directors, tie executive pay to total shareholder return, and eliminate ongoing losses, warning that immediate action is required to protect shareholder value and restore credibility." #governancearbitrage #boardsofdirectors #corporategovernance #activistinvesting #valuecreation #performance https://lnkd.in/gUWs_gKq

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ABS has turned producing reserves into bond-like instruments. The problem for sponsors? The bondholders get paid first. Every month the waterfall clears trustee fees, taxes, LOE, hedges, interest, principal, and reserves before equity sees a dime. Which means one truth: hedges cap upside, production tests cap volume, and the only lever left is cost. Take a live example: Base OPEX = $1.40/Mcfe → DSCR 1.10x → 100% cash sweep → zero residual. Cut OPEX 10% = $1.26/Mcfe → DSCR 1.18x → sweep falls to 50% → sponsor pockets $190k/month while still paying down debt. What looks like a small cost save is actually a release valve in the indenture—shifting dollars from turbo-amortization to equity distributions. And that matters, because oil and gas companies aren’t in the business of structuring ABS for sport. They’re in it to turn that freed-up cash into a competitive edge: building scale as the dominant PDP aggregator and, just as importantly, making real money while doing it. And this requires a different playbook—one closer to Toyota than to traditional field ops. Overlay your cost base with systematic market intelligence: track vendor pricing shifts in real time, time lock-ins to your scale, negotiate concessions from a position of data, not anecdotes. Do that, and you don’t just “run lean.” You manufacture DSCR headroom, ratchet down sweeps, and transform stranded cash into repeatable equity distributions. This is the only lever that matters for sponsors under ABS—and in the next installment, we’ll show how to institutionalize it.

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The $123 billion Massachusetts Pension Reserves Investment Management Board (MassPRIM) pension fund allocated $1.7 billion to private equity strategies last year, which remain below the $2 billion to $3 billion in the 2025 annual investment plan. This year, officials have lowered the size of the the annual investment plan to fall into line with the slow down in mandates. https://lnkd.in/g6Y39tXi

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What distinguishes an advisory board from a board of directors? Understanding their unique roles can significantly impact your organization's governance and strategic execution. Advisory boards serve as a vessel for specialized insights, providing non-binding recommendations that drive innovative thinking without formal governance responsibilities. In contrast, boards of directors wield legal authority and accountability, ensuring compliance and strategic oversight that are vital for sustainable growth. Engaging both boards can enrich decision-making processes, blending operational guidance with strategic control. This understanding is not only critical for business leaders but also insightful for those looking to strengthen their organizational frameworks. What role do you think each board type plays in your company’s growth? #AdvisoryBoard #BoardOfDirectors #BusinessStrategy #CorporateGovernance #Leadership https://lnkd.in/efXVxt27 Boardroom Advisors: Part-Time CEOs MDs NEDs for Scale-Ups and SME's.

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Barron's journalist Kenneth Corbin sits down with Paul Karger, CFA and John Pantekidis to unpack the complex narrative surrounding the Commonwealth’s new tax on high earners: https://lnkd.in/eUEi2PTv They explore key concerns including: - The potential departure of wealthy residents - The risk of a "brain drain" - Impacts on charitable giving - The growing role of trust vehicles in wealth planning An insightful conversation on the broader implications for Massachusetts' economic landscape #TaxPolicy #WealthManagement #Massachusetts #CharitableGiving #Trusts #BrainDrain #Barrons  

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Most deals do not fall apart because of price. In my conversation with Michael Rubin Jr., we unpacked the real reasons M&A deals break down before closing. Misaligned expectations, lack of preparation, and unresolved issues that surface too late in the process are often the real culprits. This is essential for anyone involved in transactions or strategic growth. #DealMaking #MergersAndAcquisitions #BusinessLessons #DueDiligence

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A new year tends to sharpen perspective for business owners. What actually happens once you decide to sell your business? Most owners are surprised by how structured and how strategic the process really is. That’s why the next section of The Anatomy of an M&A Deal is now live. It focuses on the mechanics that separate smooth, value-maximizing transactions from reactive, high-stress ones. This section covers: 📘 Chapter 4: The 10 Phases of an Exit 📘 Chapter 5: DIY vs. Hire an Advisor 📘 Chapter 6: Assembling Your Deal Team Understanding the roadmap, knowing when to bring in expertise, and building the right team reduces uncertainty and protects value. Preparation isn’t optional, it’s leverage. And leverage is built long before a deal is ever on the table. #MandA #ExitPlanning #DealStrategy #BusinessOwners #ValueCreation #LowerMiddleMarket #BusinessStrategy #SuccessionPlanning #DealAdvisory

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PENSION FUND NEWS: The $80 billion Pennsylvania Public School Employees' Retirement System (PSERS) has approved a €100 million ($116 million) commitment to DIF Infrastructure Fund VII, a private infrastructure fund managed by CVC DIF. https://lnkd.in/gMuCYR9g

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