The lower middle market, when held up against the overall middle market, requires a greater amount of focus on growth from the private equity firms that are conducting deals within the space, explains Maneesh Chawla, principal at Prospect Partners. The Chicago private equity firm recently completed an add-on acquisition in April when it purchased EDN Aviation Inc. and folded it into current portfolio company Velocity Aerospace Group Inc., an aviation maintenance and repair service. Before that, it picked up family-owned business Wedgewood Hospitality, a growing provider of wedding and banquet services. Mergers & Acquisitions recently caught up with Chawla at ACG Boston DealSource Select to talk about the nuances and hurdles of completing deals at this end of the M&A chain. (For video, see "Prospect Sees Potential in Smaller Segments" below.)

What’s challenging lower middle market companies?

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