Selling a Business in Chicago
Chicago is the Midwest's financial and business capital — and one of the most active mid-market M&A markets in the United States. Home to some of the country's most successful PE firms and a deep base of industrial, financial, and consumer businesses, Chicago offers business owners a buyer universe that is pragmatic, well-capitalized, and operationally sophisticated.
The Chicago mid-market M&A landscape in 2026
Chicago's mid-market — broadly businesses with enterprise values between $10M and $500M — is characterized by a buyer community that is operationally focused and fundamentals-driven. The city's PE firms are among the most respected in the country: Vista Equity Partners, GTCR, Madison Dearborn Partners, and Flexpoint Ford all run active deal pipelines from Chicago, and their presence creates a sophisticated and competitive buyer ecosystem.
Activity in 2025-2026 reflects continued strength in industrial and manufacturing consolidation, sustained PE appetite for technology-enabled services businesses, and growing interest in healthcare services as demographic trends drive demand. Multiples in Chicago's core sectors — manufacturing, logistics, consumer goods — trade at a modest discount to coastal markets, but the buyer conviction in proven, cash-generative businesses is strong.
Chicago buyers are pragmatic. They focus on real earnings, operational track records, and management teams that can execute post-acquisition integration. They are less likely than New York or San Francisco buyers to pay up for growth stories that have not yet converted to EBITDA, and more likely to reward businesses with durable competitive positions and clean financial histories.
For Midwest founders, Chicago often offers the best combination of buyer depth, deal sophistication, and realistic valuation expectations. Running a competitive process that includes both local PE funds and strategic buyers — including out-of-market acquirers who value Chicago businesses for their geographic footprint and customer relationships — consistently produces better outcomes than bilateral negotiations.
Key sectors driving Chicago M&A
Chicago's economy is built on industrial strength, financial services depth, and a growing technology sector. Here is what buyer appetite looks like across the city's most active M&A segments.
Industrial & Manufacturing
Chicago's industrial base is one of the most active M&A segments in the Midwest. Precision manufacturing, industrial services, specialty chemicals, and engineered products businesses attract strong interest from strategic consolidators and operationally focused PE funds. Buyers in this space are disciplined underwriters who focus on EBITDA margins, customer diversification, capex intensity, and the condition of real estate and equipment. Multiples are typically below coastal markets, but deal activity is consistent and buyer conviction is high in defensible niches.
Financial Services & Trading
Chicago is home to the CME Group, the world's largest derivatives exchange, and a dense ecosystem of trading firms, market makers, and financial technology businesses that serve the capital markets infrastructure. Financial services M&A here spans wealth management, insurance, specialty finance, and the proprietary trading and fintech businesses that cluster around the exchanges. Regulatory considerations — CFTC oversight, broker-dealer registrations, investment adviser requirements — are deal-specific and require early attention.
Food, Consumer Goods & Retail
Chicago is a global hub for the food and consumer goods industry — home to the headquarters of Kraft Heinz, Mondelez, Conagra, and dozens of mid-sized consumer brands. M&A activity in this sector is driven by strategic buyers seeking brand acquisitions, SKU rationalization, and distribution capabilities. PE-backed consumer platforms are also active. Brand equity, private label exposure, retailer concentration, and supply chain resilience are the primary buyer underwriting criteria.
Healthcare & Life Sciences
Chicago's healthcare sector spans large health systems, physician groups, medical device manufacturers, and healthcare services businesses. Abbott Laboratories and Baxter International anchor a broader ecosystem of healthcare suppliers, distributors, and technology businesses. PE consolidation of specialty physician practices — behavioral health, dental, dermatology — is particularly active. Illinois Certificate of Need requirements and Medicaid reimbursement exposure affect deal structure in healthcare services transactions.
Transportation, Logistics & Supply Chain
O'Hare International Airport and Chicago's position as the US rail hub make it the logistics capital of the country. Third-party logistics providers, freight brokers, intermodal operators, and supply chain technology businesses are consistently active M&A targets. The sector's fragmentation has made it attractive to PE roll-up strategies, while large strategics — XPO, Echo Global, C.H. Robinson — remain active acquirers of asset-light logistics and technology businesses.
Technology & Business Services
Chicago's technology sector has grown substantially, particularly in enterprise software, insurtech, and B2B SaaS. The Fulton Market and River North corridors have become established tech hubs. Chicago-based PE funds — Vista Equity Partners, GTCR, Madison Dearborn Partners — are among the most active technology investors in the country, and their presence creates consistent demand for software and technology-enabled services businesses at every stage of growth.
US-specific considerations when selling your business
Selling a US business involves deal mechanics, tax elections, and structural decisions that differ materially from other markets. These are not obstacles — but they need to be planned for before the process begins.
Quality of Earnings Report
A Quality of Earnings (QoE) report is a standard requirement in Chicago mid-market transactions, particularly where PE buyers are involved. Chicago's PE community — including Vista Equity, GTCR, and Madison Dearborn — runs disciplined diligence processes, and a sell-side QoE prepared before going to market compresses timelines and reduces the risk of re-trading. The report normalizes EBITDA, reviews working capital trends, and scrutinizes add-backs that buyers will challenge anyway. For any business above $5M EBITDA, a sell-side QoE is a sound investment.
Deal Structure: Asset Sale vs. Stock Sale
The asset sale versus stock sale election is a standard negotiating point in every US transaction. Buyers — particularly PE funds and corporate acquirers — prefer asset purchases or 338(h)(10) elections to step up the tax basis of acquired assets. Sellers typically prefer stock sales for capital gains treatment and to avoid recapture on depreciated assets. Illinois has a corporate income tax rate of 9.5% (including the personal property replacement tax), which affects net proceeds on asset sales for C-corps. Getting M&A tax counsel involved early is essential to optimizing your after-tax outcome.
Working Capital Peg & True-Up
US purchase agreements include a working capital mechanism that adjusts the final purchase price based on the actual working capital delivered at close versus a target peg — typically the trailing twelve-month average. Post-closing true-up disputes are one of the most common sources of friction in US deals. Sellers who understand their working capital dynamics, have clean accounts receivable aging, and can defend their normalization methodology are in a much stronger position during negotiation and post-closing adjustment.
Rep & Warranty Insurance
Representation and warranty insurance is standard in US mid-market transactions and has become expected by Chicago's institutional PE buyer community. It reduces the seller's indemnification tail — limiting how long and how much of the proceeds remain at risk post-close — and provides buyers with a creditworthy recovery source. The cost is typically 2-4% of the insured limit and is negotiated as part of the deal economics. Most sellers in the $20M-$200M range benefit materially from R&W insurance coverage.
What Chicago buyers are looking for right now
Chicago's buyer market in 2026 is disciplined and operationally focused. PE buyers are underwriting businesses they expect to grow and eventually re-sell — which means they are scrutinizing management quality, market position, and earnings sustainability more carefully than headline revenue or growth rates. Strategic buyers are looking for defensible additions to their platforms. Both groups reward preparation and penalize surprises in diligence.
Proven EBITDA with limited reliance on the owner
Chicago PE buyers want to see a business that runs without the founder in the room. Businesses where the owner is the primary rainmaker, key account manager, or operational decision-maker require extra structuring — typically through earnouts or rollover equity — to address transition risk.
Customer diversification and contract visibility
Concentration in a single customer or a handful of accounts is the most common valuation discount in Chicago M&A. Buyers look for diversified customer bases, recurring or contracted revenue, and evidence that key relationships are institutional rather than personal.
Operational infrastructure that can scale
Buyers are acquiring platforms they intend to grow, either organically or through add-on acquisitions. Businesses with documented processes, capable middle management, and technology systems that can handle volume growth are valued significantly higher than those dependent on tribal knowledge.
Clean environmental and real estate history
For industrial and manufacturing businesses in the Chicago area, environmental liability is a standard due diligence focus. Phase I environmental assessments — and Phase II where warranted — are expected. Known environmental issues are not deal-killers, but they need to be disclosed early and priced appropriately.
Also in the US
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