CMG’s Terence Hannafin and Geoff Bradley spent two solid days at M&A East speaking with private equity investors, lenders, and fellow dealmakers from across the lower middle market. One thing was clear: momentum is returning. Deals are moving again, confidence is improving, and 2026 is setting up to be an active year for M&A.
Key Themes From M&A East:
- Uber-competitive for A+ companies: Premium opportunities are drawing deep benches of buyers and stronger valuations
- PE groups are picking their spots: PE groups are being more selective, but leaning in hard when they have conviction
- Exploring the white space: Some investors are pushing into less crowded sectors, like construction products and services tied to new-build activity, looking for a competitive edge beyond price
- Diligence is taking much longer: Post-LOI diligence timelines are stretching as investors adopt a more measured approach, ensuring every detail is thoroughly examined an no stone is left unturned before closing [CMG Pro tip: another reason sellers need to focus keenly on preparation ahead of going to market]
- Creativity is back [for better or worse]: Where valuation gaps persist, the use of earnouts, minority recaps, and other flexible structures are being explored to keep deals moving
- Supportive Financing: While the cost of capital remains elevated, lenders continue to actively deploy capital and support deal activity
What Wasn’t Top of Mind:
- Tariffs: Despite the headlines, tariffs were not cited as materially impacting overall deal flow or valuations, but are a likely contributor to more cautious market activity among companies with international sourcing exposure
- Election impact: Investors seem focused on fundamentals, not forecasts.
Thank you to ACG Philadelphia for hosting another top-notch event and for bringing together such a strong mix of investors, advisors, and operators. Always great to reconnect, compare notes, and see the energy building again in the market.