Naturally, the start of a new year has you thinking about the 365 days ahead of you. 2025 brought many changes, and 2026 is sure to have its own set of challenges and opportunities. From popular deal structures to industry-specific trends, here are six mergers and acquisitions trends that business owners thinking of selling should know.
After three years of biding time and collecting ~$1.6 trillion in dry powder, private equity buyers began reentering the market in late 2025. A combination of more favorable market conditions, timing, and pressure from limited partners to deploy capital led to their reentrance. Private equity activity in 2025 led to three quarters of consecutive middle market add-on acquisition activity growth for the first time since 2022. Now is an ideal time for middle-market business owners.
Private equity buyers weren’t the only ones active in 2025– strategic buyers remained steady throughout the year. Not only were they consistent, but strategic deal volume went up 21% between Q3 of 2024 and 2025. Comparatively, strategic buyers have better negotiation power, since they are less rate-sensitive than financial buyers. That, combined with tariff-driven costs, pre-existing cash reserves, etc., created a powerhouse out of strategic buyers.
Many industries experienced YOY volume declines upwards of 20% through Q3 of 2025, but other industries encountered opportunities and growth that were equally as impactful. Namely, the Aerospace, Defense, Government & Security (ADGS), specific sub-industries in healthcare, and industrial service providers all saw double-digit growth in 2025 and can be expected to continue thriving into 2026.
Creative deal structures have been used to overcome valuation gaps between buyers and sellers for years, and the trend continues through 2026. Earnouts, rollover equity, seller notes, and other deal structures have been on the rise, but not all potential earnouts are realized. It’s important to proceed with caution and consult your team of mergers and acquisitions professionals before engaging.
Hand in hand with creative deal structuring, the narrowing of valuation gaps has been trending since Q3 of 2025. There are a number of cited causes for this, including stabilizing interest rates, improved credit access, better-aligned buyers and sellers with more realistic expectations, and more. Well-prepared sellers entering the market have a higher chance of securing the strongest multiples.
Global M&A is at an all-time high, fueled by the emergence of and continued use of artificial intelligence. AI has been a key driver of the current mergers and acquisitions supercycle that affects whole sectors of the economy. Artificial intelligence is completely changing the game, not just for tech, but for the industrial, energy, and infrastructure sectors due to the necessity of new data centers to keep up with the AI demand.
It’s important to look at the year ahead when considering the sale of your business. Contact Stony Hill Advisors today to learn more about how you could take advantage of these trends during your M&A journey. Let’s work together.