The Deal Strategy Behind 400+ Middle-Market Transactions

Transaction volume reveals much about private equity strategies. Some firms complete a handful of large deals annually. Others pursue dozens of smaller transactions. Sami Mnaymneh built HIG Capital around the latter approach, completing over 400 investments across 32 years.

This velocity reflects the firm’s middle-market focus. Targeting companies with enterprise values between $50 million and $500 million requires more transactions to deploy capital than pursuing billion-dollar deals. The approach demands different sourcing, evaluation and execution capabilities than mega-deal strategies.

Mnaymneh serves as founder, executive chairman and CEO of the firm managing $70 billion across seven investment strategies. HIG Capital operates 19 offices worldwide and employs over 1,000 people. Understanding how the firm sources, evaluates and executes hundreds of transactions offers insights into middle-market deal strategies.

Sourcing Strategies

Deal flow begins with sourcing. How does a firm identify several hundred attractive investment opportunities over three decades? HIG Capital employs multiple approaches.

First, the firm built relationships with business owners, management teams and intermediaries focused on middle-market transactions. These networks provide consistent flow of opportunities as companies seek capital for growth, recapitalization or ownership transition.

Second, HIG Capital’s operational focus attracts sellers valuing partnership beyond pure price. Middle-market business owners often care about companies’ futures after exits. Demonstrating value creation capabilities helps win transactions even without highest bids.

Third, the multi-strategy platform expands the opportunity set. The firm can pursue buyouts, growth equity investments, lending transactions, real estate deals and infrastructure opportunities. This breadth increases the volume of relevant opportunities.

Fourth, geographic diversification across 19 offices provides access to deal flow across North America, Europe, Latin America, the Middle East and Asia. Regional teams develop local relationships and market knowledge, identifying opportunities competitors might miss.

Before building HIG Capital, Mnaymneh prepared for this sourcing challenge through education and experience. He graduated first in his class at Columbia University with a B.A. summa cum laude, then earned both a J.D. from Harvard Law School and an M.B.A. from Harvard Business School with honors. Following roles at Morgan Stanley and as a managing director at The Blackstone Group, he understood what successful deal sourcing required.

Evaluation Framework

Screening hundreds of opportunities to identify attractive transactions requires systematic evaluation frameworks. HIG Capital developed approaches for efficiently assessing potential investments across diverse industries and geographies.

The firm evaluates opportunities against consistent criteria regardless of strategy. Does the company operate in attractive markets with favorable dynamics? Does management possess capabilities to execute growth plans? Can HIG Capital create value through operational improvements, strategic initiatives or financial optimization?

However, specific evaluation approaches vary by strategy. Buyout investments emphasize operational improvement potential and management quality. Growth equity focuses on scalability and market opportunities. Direct lending prioritizes credit analysis and downside protection.

Mnaymneh personally approves all capital commitments despite transaction volume. This centralized review ensures consistency while also creating quality control mechanisms. Investment teams must present opportunities addressing key evaluation questions before proceeding.

The firm employs over 500 investment professionals conducting due diligence, financial analysis and operational assessment. This capacity allows evaluating numerous opportunities while maintaining thorough analysis standards.

Execution Capabilities

Winning transactions requires execution capabilities beyond evaluation. Sellers consider speed, certainty and partnership quality alongside price. Middle-market transactions often involve family-owned businesses or management teams valuing these factors substantially.

HIG Capital built execution capabilities supporting transaction velocity. The firm can move quickly when opportunities require rapid decisions. Experienced professionals handle standard processes efficiently, allowing focus on deal-specific issues.

The firm’s scale also provides execution advantages. Committed capital across multiple funds allows deploying resources without fundraising constraints. Relationships with lenders facilitate financing arrangements. Legal and accounting resources handle documentation and closing processes.

However, centralized approval creates potential execution constraints. Requiring Mnaymneh’s personal review before proceeding could slow processes compared to competitors with distributed authority. The firm addresses this through efficient presentation processes and clear decision-making frameworks.

Transaction Types

HIG Capital’s 400+ transactions span diverse deal types. Traditional buyouts represent one category, involving acquiring controlling stakes and implementing operational improvements. The firm targets companies with $50 million to $500 million in enterprise value across numerous industries.

Growth equity investments provide capital to companies scaling operations without acquiring control. These transactions support businesses not ready for buyouts but needing resources to capture market opportunities.

Direct lending transactions through WhiteHorse provide debt capital to middle-market companies. The platform has invested approximately $18 billion in 285 companies since inception. The fourth fund closed at $5.9 billion in August 2025, demonstrating lending volume alongside equity transactions.

Real estate transactions focus on value-add properties requiring operational improvements or repositioning. Infrastructure investments target essential service providers with predictable cash flows. Special situations debt and growth-stage healthcare round out the transaction types.

Geographic Distribution

Transaction geography has evolved as HIG Capital expanded internationally. Early deals concentrated in the United States as the firm built capabilities and track record. Over time, transactions spread across multiple continents.

European transactions have grown particularly active. Recent investments in 2025 included companies across Finland, Spain, Germany, France and Italy spanning sectors from waste management to occupational health to aerospace logistics.

Latin American transactions leverage the firm’s Miami headquarters and regional offices. While Latin American private equity presents challenges, HIG Capital’s early commitment and local presence provided advantages.

Middle Eastern and Asian transactions represent smaller portions of activity but demonstrate global reach. The firm operates offices in Dubai and Hong Kong, providing platforms for pursuing opportunities in these regions.

Sector Focus

Transactions span diverse sectors reflecting middle-market opportunity breadth. Healthcare investments include provider services, medical devices, healthcare IT and related businesses. Technology deals range from software to IT services to tech-enabled business services.

Business services represent another active sector, encompassing outsourced functions, specialized services and recurring revenue businesses. Consumer products and services transactions include brands, retail concepts and consumer-facing businesses.

Industrial and manufacturing deals target companies with operational improvement potential or consolidation opportunities. Real estate and infrastructure transactions complement operating company investments.

This sector diversity provides portfolio construction benefits while requiring building expertise across multiple industries. HIG Capital developed specialized knowledge allowing evaluation and value creation in diverse businesses.

Value Creation Approaches

Transaction success depends ultimately on value creation. How does HIG Capital drive improvements across hundreds of diverse companies? The firm employs multiple approaches depending on company situations and opportunities.

Operational improvements represent the most common value creation driver. Middle-market companies often have inefficiencies that sophisticated investors can address. Sales force expansion, supply chain optimization, technology implementation and other initiatives drive performance.

Add-on acquisitions create value through consolidation and scale benefits. Many portfolio companies pursue buy-and-build strategies, acquiring competitors or complementary businesses. These acquisitions often generate synergies and market position improvements.

Management team strengthening addresses leadership gaps. Middle-market companies sometimes lack experienced executives in key functions. Recruiting talent or providing strategic guidance helps companies execute growth plans.

Financial optimization includes refinancing debt, improving working capital management and implementing financial systems. While less transformative than operational improvements, these initiatives still contribute meaningful value.

Exit Strategies

Realizing value requires eventual exits. HIG Capital has completed numerous portfolio company sales over three decades through multiple exit paths. Sale to strategic buyers represents the most common exit. Operating companies acquire portfolio companies to enter markets, add capabilities or gain scale.

Sales to other private equity firms provide liquidity when strategic buyers don’t emerge or when portfolio companies benefit from additional private ownership. Secondary buyouts have become more common industry-wide.

Public offerings historically provided exit paths, though IPO markets have been less active recently. A few portfolio companies have accessed public markets when conditions allowed.

Recapitalizations represent partial exits, allowing HIG Capital to realize some value while retaining ownership. These transactions provide portfolio company capital while generating distributions to limited partners.

Extended holding periods have become common as exit markets tightened. Many portfolio companies remain in portfolios longer than historical 4-6 year averages. This requires continuing value creation beyond typical timeframes.

Recent Transaction Activity

HIG Capital’s recent activity demonstrates continued transaction velocity. Investments in 2025 included destination management companies, cloud technology providers, revenue cycle management services, home warranty businesses and cruise excursion operators.

The firm also completed several exits. Portfolio company sales included Soleo Health to Court Square Capital and WindRose Health Investors, SoldierPoint Digital Health to GovCIO and United Flow Technologies to Berkshire Partners.

This combination of investment and exit activity demonstrates the firm’s continued ability to deploy capital while generating returns for limited partners. Maintaining both investment pace and exit velocity proves challenging during difficult market periods.

Market Environment Impact

Current market conditions affect transaction dynamics across private equity. Elevated interest rates increase acquisition financing costs, affecting purchase price economics. Exit market constraints reduce transaction velocity and valuation levels.

However, middle-market deal flow may prove more resilient than large-cap transactions. Thousands of middle-market companies continue requiring capital for growth, recapitalization or ownership transition regardless of broader conditions.

Additionally, competition dynamics differ in middle markets. While deal multiples have risen, fewer buyers compete for individual transactions compared to mega-deals attracting numerous bidders. This potentially preserves advantages for experienced middle-market investors.

HIG Capital’s transaction approach emphasizes operational value creation over financial engineering. This focus potentially matters more in environments where leverage and multiple expansion contribute less to returns.

Looking Forward

After 400+ transactions over three decades, HIG Capital continues pursuing middle-market opportunities. The firm’s deal strategy — emphasizing volume, operational focus and multi-strategy flexibility — has produced sustained activity through multiple market cycles.

Whether this approach continues delivering results depends on execution, market conditions and competitive dynamics. The middle market offers abundant opportunities but faces intensifying competition as more capital targets this segment.

For now, the transaction strategy Mnaymneh established in 1993 continues characterizing HIG Capital’s activities. The firm’s ability to source, evaluate and execute hundreds of transactions remains central to its identity and competitive positioning.