In commerce, middle-market companies or midmarket companies are generally those companies with revenues between US$ $5 million and $3 billion per year. The wide range is due to the fact that there is no precise definition of the term. Some finance professionals might consider the mid-market to be $100 million to $3 billion, while others consider it to be $5 million to $500 million. In either case, it does not include "main street" or smaller businesses like the corner store. At the uppermost 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, provide a poor basis upon which to compare companies - due to the difference in asset turns in different industries. Accordingly, some[who?] regard either asset size or number of employees as a better metric for comparing company sizes.
The Association for Corporate Growth (ACG), an international organization which aims (among other things) to drive middle-market growth, serves as the voice of the middle market, encouraging "the growth and development of middle-market companies by supporting policies that foster and incentivize private capital investment". ACG publishes Middle Market Growth online.
In the United States of America
According to United States Census data, 20,000 companies constituted the middle market in the United States of America in 2007, the latest data available as of 2014[update]. Mid-market companies account for the middle third of revenue generated by all U.S. companies, and employ over 30 million people. Collectively, the mid-market generates approximately US$10 trillion of the US$30 trillion of annual gross receipts in the United States. If the U.S. middle market were a country, its GDP would rank it as the fourth-largest economy in the world. Private equity companies such as Ted Virtue's MidOcean Partners focus on these middle-market companies due to their specalization in a particular product or service.
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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- Census Bureau, US. "Statistics about Business Size (including Small Business) from the U.S. Census Bureau". US Census Bureau. Retrieved 4 July 2014.
- Henrekson, Magnus, and Dan Johansson. "Institutional effects on the evolution of the size distribution of firms". Small Business Economics 12.1 (1999): 11-23.
- "LEARN: Middle Market Voice". middlemarketvoice.org. ACG: Association for Corporate Growth. Retrieved 2014-10-10.
ACG encourages the growth and development of middle-market companies by supporting policies that foster and incentivize private capital investment.
- Middle Market Growth
- National Center for the Middle Market