2026 — An Inflection Point for M&A

As 2026 approaches, expectations across the M&A market are cautiously optimistic. After several years of cyclical volatility, dealmakers are signaling that the coming year could represent a meaningful turning point — particularly in the middle and lower-middle markets. According to EY-Parthenon, U.S. deal volume for transactions above $100 million is projected to grow modestly through 2026, with private equity activity up roughly five percent year over year (EY Report). While that growth may appear measured, the shift in tone is unmistakable: M&A is re-emerging as a central strategic lever rather than a defensive move.

Multiple factors underpin this shift. Interest rates are stabilizing, credit markets are thawing, and corporate balance sheets are healthier than at any point since 2021. Buyers are focusing less on scale for its own sake and more on strategic acquisitions that expand capability, accelerate digital transformation, or reposition portfolios for long-term competitiveness (Ainvest). Sellers, particularly founder-led businesses, are showing renewed openness to conversations they paused during the last two years of economic uncertainty.

If current forecasts hold, 2026 may prove to be a year defined by fewer but higher-quality deals — transactions where clarity of purpose, execution speed, and post-close integration will determine success.

Our Take
At Beach Tree Capital, we view 2026 as a strategic inflection point for the clients we serve. Our role is to help owner-operators, investors, and strategic buyers prepare for the window ahead — ensuring that when opportunity emerges, they have the insight, structure, and readiness to move decisively and capture value.