There’s a gold rush happening in the sub-$50M deal space, and private equity firms are pouring in. These smaller platform and add-on opportunities are often less picked over, offer stronger ROI potential, and fit well into roll-up strategies.

But with over 1,000 active LMM PE buyers in the market (up from just 300 a few years ago), competition for quality deals is intense. The firms landing the best sub-$50M deals are doing one thing exceptionally well: outsourcing their deal sourcing to specialized platforms.

Here’s how top firms are changing their approach in 2025:

1. Volume Without the Headcount

Sourcing smaller deals often means higher volume such as more outreach, more screening, more follow-up. Instead of building a big in-house team, firms are using services like OutSearched to handle the outbound work efficiently and affordably.

2. Targeting Fragmented Industries

Sub-$50M deals often live in fragmented sectors like home services, specialty manufacturing, niche healthcare, where platform-and-add-on strategies shine. OutSearched allows buyers to define exact targets by industry, revenue range, owner type, and more.

3. Avoiding Over-Shopped Deals

The best deals aren’t in your inbox. They’re in the inboxes of founders who haven’t yet talked to a banker. OutSearched helps PE firms generate proprietary deal flow that’s truly off-market, before sellers are pushed into a full auction.

4. Keeping Deal Costs Low

For a $20M business, paying hefty success fees or retainer costs can eat into your economics quickly. OutSearched’s model, which is about 1/8 the cost of traditional channels, keeps sourcing ROI positive and repeatable.

5. Speed and Certainty Win

Smaller businesses don’t want complexity. They want a clear, trustworthy buyer who moves fast. Firms using OutSearched get to those sellers earlier, giving them time to build trust and shorten close timelines.

Key Takeaway:

Sub-$50M acquisitions may look simple on paper, but sourcing them at scale takes strategy, speed, and systems.

Private equity firms using tech-enabled, outsourced deal sourcing services like OutSearched are landing better targets faster, avoiding the crowded auctions that kill margins.

In 2025, the winners in the lower middle market aren’t the biggest firms, but they are the smartest.