On May 14-16, 2026, Michael Stone and Ross Walker attended the Association for Corporate Growth (ACG) Mid-South Capital Connection conference in Nashville, TN along with over 450+ attendees representing hundreds of private equity firms, investment banks, lenders, strategic acquirers, and advisors across the middle and lower-middle markets. Taking place nearly a year after the tariff announcements, this year’s conference was a good touch point to gauge overall market sentiment and aftershocks, if any, from the Liberation Day announcements that slowed down the 2025 M&A market. Our conversations throughout the conference offered a clear view into how dealmakers are approaching the year and the status of the middle and lower-middle markets in 2026. Below are a few highlights from our discussions.
Deal Activity Has Increased Compared to 2025
We spoke to many attendees on how their portfolio companies and deal activity was affected in 2025. It was evident that deal activity was hampered by the uncertainty of tariffs, but with tariffs in the rearview (for now), sellers have recovered and there are many potential buyers eager to purchase the right type of assets in 2026. Many attendees noted that deals that went away or paused in the aftermath of Liberation Day have now reemerged. Improved visibility around input costs and the supply chain have restored confidence, and more owners are now either starting or restarting the process of selling their companies. In turn buyers are now moving quickly to secure assets, making for an active and competitive market.
A More Competitive Buyer Pool
The buyer pool has continued to grow more competitive as new buyers have entered the market. Many established sponsors have lowered their minimum investment thresholds or established SBIC funds to become more active in pursuing smaller opportunities despite a broader recovery in deal volume. At the same time, established family offices are gaining more traction with many of them pursuing opportunities with lower-middle and middle-market companies. All of these factors combined have led to a larger than normal buyer pool, which is positive for sellers, and significant opportunities for small companies that can be an add-on investment for the right buyer.
Valuations Have Increased Since Last Year
Partially due to large amounts of idle cash and increased competition among buyers, there was a common sentiment among attendees to whom we spoke that valuations have increased since this time last year. While most buyers are remaining disciplined, many noted that they are willing to stretch for the right companies with stronger management teams and financials that fit within their thesis as platform or add-on companies.
High‑Demand Sectors in Today’s Market
Not much has changed since we attended ACG South in early February (or really in the last year or so) for this category. The heavily sought-after companies are those in the business services, healthcare, residential services, manufacturing, and automation spaces. Specifically, companies that provide services or manufacture products for data centers are in high demand and achieving strong growth. We heard of several private equity firms who own companies that have successfully repositioned their products for data center use and have seen their revenue increase two to threefold. With the expectation that the global capacity for data centers will at least double by 2030 and that even more data centers will be needed for AI, companies in this space will be interesting to watch in the coming years.
To Sum It All Up
The conference made it clear that dealmakers are heading into 2026 with real momentum as the market moves past last year’s tariff-driven uncertainty. What stood out most was how different the buyer landscape feels now with more participants in the mix, more flexibility in how they invest, and a noticeable sense of urgency. Rising valuations are not slowing buyers down. If anything, it seems as if they are reinforcing the push to deploy capital while strong opportunities are still available. To sum it all up, it seemed evident that the market is shaking off the disruptions of 2025 and is gearing up for a far more competitive and active 2026.
Why Partner with PW&Co
Over the years, we have helped many business owners navigate the complexities of the deal process by providing structure, market knowledge, and disciplined execution to facilitate transactions that align with their goals. With competition high and diligence standards increasing, having an experienced advisor ensures you capture the full benefit of today’s market while avoiding leaving value on the table. If you are interested in selling your business, acquiring a business, or learning more about what your business is worth, please contact myself, Michael Stone, or visit us online to learn more.
