Coming off a somewhat sluggish year, the general sentiment is that deal flow will pick up in 2026. The market isn’t anticipating a blowout year like we saw in 2021-22, but steady increases in deal volume and values are expected. This is attributed to more “normalized” economic conditions, continued demand from institutional markets, and improved lending environments.
While there is still some looming uncertainty, geopolitical implications, trade policies, supply chains, and the like, have largely stabilized (for the time being). The market has had time to rationalize change and is operating at more normalized levels today. Barring any major surprises in 2026, we anticipate this will drive more reliability and predictability across the board.
There is still a tremendous amount of dry powder on tap with some estimates coming in over $1 trillion in the US alone. Successful fundraising over the past few years coupled with stalled deployment of capital results in significant PE war chests and pressure from LPs to generate more activity. Additionally, improvement of SMB balance sheets and earnings profiles will help smooth the M&A demand curve.
Lastly, recent cuts in the fed rate and controls on inflation will continue to open up capital markets and promote more favorable lending conditions. As business performance improves, underwriting efforts and valuation alignment will drive more closings in 2026. Certain industries will outpace others, and investors will prioritize deals that show resiliency to market cycles and have strong industry tailwinds. The impact of AI across industry will likely draw significant attention in the near term as investors seek to rationalize portfolios and lean into new technologies.
Regardless of macro trends, marketability of assets is always unique to each business. Please don’t hesitate to connect directly should you like to learn more about your business and prospects going into 2026.
Business Acquisition & Merger Associates (www.buysellyourbusiness.com), a Charlotte, NC advisory firm, assists business owners in growth recapitalizations, business transfers to financial or strategic buyers, and management buyouts. BAMA also helps companies grow by providing buy-side sourcing services that identify potential add-on acquisitions to expand geographic footprint or add strategic products and capabilities.