5 Reasons Asset Deals Dominate Small & Mid-Market M&A

In the lower and mid-market space, especially for deals under $10M, asset deals are far more common than share deals. Here’s why they dominate.

1. Lower Liability Risk

Buyers avoid inheriting hidden debts, lawsuits, or compliance risks. They only take what’s valuable.

2. Better Tax Treatment

Many jurisdictions allow buyers to depreciate or amortize newly acquired assets, improving cash flow.

3. Easier Financing

Asset-backed financing is easier for lenders to approve since loans are tied to tangible assets.

4. Transparency

Asset deals provide a clear picture of what’s being bought, reducing valuation disputes.

5. Flexibility

Buyers can cherry-pick profitable units or intellectual property without taking over unnecessary liabilities.

Example: A buyer acquiring only the profitable retail stores of a struggling franchise, leaving behind debt-heavy outlets.

Although asset deals involve more paperwork, the benefits of reduced risk and increased flexibility make them popular in smaller M&A transactions.