Seyfarth Releases 2024/2025 Middle Market M&A Survey

September 24, 2025 - Seyfarth Shaw LLP has released its 11th annual Middle Market M&A SurveyBook, analyzing more than 150 middle market private target acquisition agreements signed in 2024 and the first half of 2025.

Intended as a guide to buyers, sellers, and deal professionals on “what’s market” in private target acquisition agreements, the annual survey tracks critical deal terms that define the allocation of risk between parties.

“Deal activity in the middle market remains relatively resilient and competitive even though M&A has experienced some softness over the past 18 months,” said Andrew Lucano, Seyfarth’s national Corporate Department chair and co-chair of the firm’s Mergers & Acquisitions practice. “Understanding where your deal terms fall relative to prevailing ‘market’ standards is more important than ever, particularly in this environment. Our survey continues to provide that critical perspective, helping dealmakers navigate negotiations with clarity and confidence.”

“Even though every transaction reflects its own dynamics, dealmakers still need a clear view of where their terms sit in today’s market,” added Aaron Gillett, M&A practice vice chair. “The data shows how R&W insurance usage, indemnity caps and escrows, and the continued use of tools like earnouts are shaping negotiations. Despite uneven conditions and new tariff uncertainty, the findings help buyers and sellers focus on the terms that matter.”

Notable findings from Seyfarth’s 2024/2025 Survey include:

• Earnouts: 13% of deals included earnouts (down slightly from 15% last year), but nearly half of those provided for earnouts equal to 50% or more of the purchase price, signaling higher stakes for sellers.
• Escrow Amounts: The median indemnity escrow amount in non-insured deals rose to approximately 9% of purchase price (up from 8% last year), with nearly half of such deals exceeding 10%—a less seller-friendly development. By contrast, insured deals had a median escrow of just 0.3%, down from 1% in 2023/2024.
• Escrow Periods: Across both insured and non-insured deals, the median indemnity escrow period held steady at 12 months, reflecting a continued trend toward shorter, seller-favorable periods.
• Survival Periods: For non-insured deals, the median general survival period increased slightly to 18 months (from 16.5 months). For insured deals, it remained at 12 months, in line with escrow terms.
• Carve-Outs: Non-insured deals saw continued growth in carve-outs for “no conflicts” (up 11% from last year to 70%) and “due organization” (up 10% to 96%). In insured deals, carve-outs for capitalization rose to 82%, while carve-outs for intellectual property fell to 13%.
• Indemnity Baskets: Among non-insured deals, deductible baskets remained most common (68%), though tipping baskets continue to account for nearly one-third of deals. All insured deals provided for deductible baskets, reflecting a seller-favorable trend.
• Indemnity Caps: The median indemnity cap for non-insured deals held steady at 10%. For insured deals, the median cap dropped slightly to 0.3% (from 0.4% in 2023/2024), underscoring the impact of R&W insurance.
• Fraud Exceptions: 94% of non-insured deals and all insured deals included fraud exceptions to indemnity limitations. Most deals defined “fraud” narrowly as intentional acts with actual knowledge.
• Governing Law: Delaware law continues to dominate, governing 67% of non-insured and 92% of insured deals.
• Privilege Retention: 80% of deals provided sellers retain attorney-client privilege post-closing, up from 74% last year.

This year’s survey also incorporates insights from Aon’s claims data, highlighting the distribution of R&W claims across industries and the types of breaches most likely to generate losses. The survey also includes SRS Acquiom’s findings on trends in indemnity escrow usage and no survival deals.

To view Seyfarth’s full 2024/2025 Middle Market M&A SurveyBook, please click here.

Seyfarth’s Mergers & Acquisitions practice provides domestic and cross-border advice on a wide range of complex M&A and other corporate transactions and applies a constructive and proven approach to a broad range of clients, from public and privately held companies to private equity firms and family-owned businesses, with a sweet spot in middle market transactions.

Seyfarth’s Corporate department offers clients a full-service, multidisciplinary team of attorneys across virtually all areas of practice. The corporate group works with an array of businesses from large well-known companies to aggressive start-ups and is highly regarded for its deep knowledge of mergers and acquisitions, securities, investment management, corporate counseling, financing, and commercial transactions.

About Seyfarth

With more than 975 lawyers across 17 offices, Seyfarth Shaw LLP provides top tier advisory, litigation, and transactional legal services to clients worldwide.