In an article for Mergers & Acquisitions – The Middle Market, Bass, Berry & Sims attorney Ryan Thomas identified eight factors that will impact M&A activity in 2026. Ryan prefaced the list by saying “The [private equity] PE M&A dam needs to break at some point given the macro-factors that still exist and point to an inevitable deal explosion,” said Ryan.
According to Ryan, the eight factors to drive M&A in 2026 include:
- Heaps of dry powder and more urgency and pressure to put that money to work
- Historically long PE holds that need to be harvested
- Failed auctions testing the waters again
- LPs looking for more returns
- Stable private credit markets
- Valuation expectations starting to align between buyers and sellers
- The need to do transformative add-ons for growth
- Strategics with cash to spend on M&A and facing pressure for quicker, inorganic growth
“The reason it feels like this will finally happen in 2026 is we are noticing a significant uptick in M&A and PE activity, both at the platform and add-on level, since Labor Day,” Ryan added. “We have also seen greater buyer urgency in moving quickly and actually closing deals.”
The full article, “Eight Factors That Will Drive More M&A in 2026,” was published by Mergers & Acquisitions – The Middle Market on December 2 and is available online (subscription required).