"A lot of family owners who are in their mid- to late-60s and early 70s," says Cascadia Capital's Michael Butler, "are contemplating transferring to their children or selling." Butler, CEO of the Seattle-based investment bank, notes generational transfer as a key trend across the middle market.

However, according to Butler in a video interview with Mergers & Acquisitions at the 2017 ACG LA Business Conference, many decisions are being made not to transfer the business to the children, instead to sell it to private equity firms or strategic buyers.

BUTLER: The first trend is generational transfer. A lot of family owners were in their mid to late 60’s to early 70’s, and their contemplating transferring to their children or selling. And many decisions are being made, not to transfer the businesses to the children, but to sell it to outside parties, either strategic buyers, or private equity funds. The second trend we are seeing into day’s market is a flight to quality. Leading companies in their market are achieving really good exit multiples. Ten, 12 times for the right businesses. Second tier companies in the same industry are not seeing the same type of multiple, and are seeing a lower multiple or no bid at all.