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January 22.2026
3 Minutes Read

Why Focusing on M&A Market Drivers is Crucial for CEOs in 2026

M&A Market Drivers 2026 handshake with rising stock graphs.

Understanding the Momentum of Mergers and Acquisitions in 2026

The mergers and acquisitions (M&A) landscape is poised for significant growth in 2026, driven by a combination of economic factors and evolving business strategies. As confidence in the market builds, small- and midsize-business leaders must navigate these dynamics to maximize their advantages, whether they’re looking to sell or acquire. Here are five key drivers shaping the M&A market this year.

Interest Rate Cuts Fueling Activity

One of the most immediate catalysts for M&A activity in 2026 is the drop in interest rates, occurring in late 2025, which has made capital more accessible for buyers. With borrowing costs down, companies can leverage debt more efficiently, resulting in higher valuations for acquisition targets. According to Zane Tarence, Managing Director at Founders Advisors, these lower rates have rejuvenated deal flow, making this a prime time for CEOs to consider their options.

Aligning Valuation Expectations

In recent years, a significant disconnect has existed between seller expectations and buyer willingness, slowing M&A activity. However, as confidence in the market grows, this gap is closing. Buyers are now prepared to deploy capital more aggressively, while sellers are adjusting their pricing expectations. This trend towards more realistic valuations allows for healthier negotiations, meaning stakeholders should ensure their businesses are well-prepared with strong fundamentals, such as growing revenues and clean financials.

The Rise of Strategic Buyers Seeking Growth

Public companies and larger strategic acquirers have shifted their focus towards acquisitions in a quest for growth, often looking beyond company size to find strategic value. Firms are now more frequently pursuing smaller companies that can bring innovative technology or market advantages. For CEOs, this presents a compelling opportunity; if your company possesses valuable intellectual property, a strong market presence, or unique talent, you may well find yourself a coveted target.

Private Equity Resurgence and Roll-Ups

After a period of caution, private equity firms are re-entering the M&A landscape with vigor. These firms are particularly interested in purchasing add-ons for their existing portfolio companies, especially within fragmented industries. This trend is creating a surge in roll-up strategies aimed at businesses with revenues in the $10 million to $100 million range. CEOs should be acutely aware of their positioning in the market—whether they serve best as a potential add-on or as a future platform—and prepare accordingly.

Increased Interest from International Buyers

Cross-border M&A activity is rising as international investors, including sovereign wealth funds, seek U.S.-based opportunities. Many are motivated by the desire to strengthen supply chains and tap into innovation. This trend signifies that U.S. companies must remain vigilant to foreign interest, as competitive offers can come from overseas, especially for businesses aligned with global operations.

Talent as a Critical Acquisitional Asset

In addition to product and market share, acquirers are increasingly recognizing the value of exceptional talent. As large firms look to streamline operations, acquiring skilled professionals has become just as crucial as acquiring innovative products or technology. CEOs should ensure that their talent pool remains focused and skilled, ready to elevate the company's value in potential deals.

Preparing for the Future of M&A

As we move forward into 2026, it is imperative for CEOs and business leaders to prepare strategically for the surge in M&A activity. Building a solid business foundation will not only help position your company favorably but also enhance its attractiveness in the eyes of potential buyers. By focusing on financial stability, competitive differentiation, and harnessing technology, you can ensure that your organization is ready to navigate the dynamic M&A landscape.

Are you ready to explore your options? Understanding these five drivers of change can help you make informed decisions about the future of your business. Whether you are looking to sell or expand through acquisition, now is the time to engage with the evolving M&A market.

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