Middle-market companies or midmarket companies are those with revenues generally between US$10 million and $1 billion per year. According to U.S. Census data, 369,122 companies constituted America's middle market in 2007, the latest data available. The lower-middle market—which most define as $5 million to $50 million—accounts for more than 95% of the total number of middle-market companies. Left are about 15,800 firms in the mid-middle market, those companies with $50mm to $500mm in revenues, and 2,182 in the upper-middle market, generally considered to be companies with revenues of $500mm to $1 b. The upper-most end of the middle market, those companies with $1 billion in revenues, are generally the smallest eligible for a credit rating by one of the major credit rating agencies.
Revenues, however, are a poor basis upon which to compare companies due to the difference in asset turns in different industries. As a result, either asset size or number of employees is considered by some to be a better metric for the comparison of company size.
Initial research conducted by the National Center for the Middle Market has shown that the U.S. middle market is made up of almost 200,000 companies with annual revenues between $10 million and $1 billion, as of October 2011. If the U.S. Middle Market were a country, its GDP would rank it as the fourth largest economy in the world.
Mid-market companies—companies that are too big to be considered SMEs, but smaller than big, exchange listed businesses—play a key role in the UK and in the other top European economies.
According to an in depth report by ESSEC Business School and GE Capital, across the UK, Germany, France and Italy (the EU-4), the mid-market represents a relatively small number of companies (ranging from a low of 1.2% in Germany to 1.7% in France) and yet it generates about one third of private sector revenue and employs about a third of each country’s workforce. Combined, the middle market in the four European countries contributes €1.11 trillion ($1.48 trillion) to the EU-4 GDP. This makes the middle market in the EU-4 one of the top 10 economies in the world, ahead of India and Russia.
In the study, Professor Ashwin Malshe of ESSEC defined the middle market differently for each country. For example, Italy has 3.7 million firms with revenue of less than€5 million, while Germany has only 1.7 million companies this size this means that applying a single European or global definition of a mid-market firm is difficult. In the UK, mid-market firms are those with between £15m and £800m of annual revenues.
The average UK middle market firm has revenue of £78 million (€98 million) and employs 500 people, similar in size to its German counterparts but larger than the typical mid-market firm in France or Italy.
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- Henrekson, Magnus, and Dan Johansson. "Institutional effects on the evolution of the size distribution of firms." Small Business Economics 12.1 (1999): 11-23.
- (National Center for the Middle Market)