Five key trends are reshaping the middle-market M&A landscape
ATLANTA, Sept. 9, 2026 /PRNewswire/ — M&A buyers are actively pursuing deals, but are raising the bar on the businesses they are willing to acquire. Bennett Thrasher, one of the nation’s leading full-service accounting and advisory firms, has identified five top trends reshaping what buyers consider an attractive middle-market business, from recurring revenue and cash generation to the growing impact of AI on a company’s competitive advantage.
“Sophisticated buyers have elevated their standards and are taking a closer look at what’s really driving a company’s performance,” said Trey Stephens, director of M&A Transaction Advisory Services at Bennett Thrasher. “When considering a deal, buyers want to know whether a company’s growth can continue, if its profits are translating into cash, and if the business can remain competitive as market conditions change.”
Top Five Trends Shaping the Latest M&A Wave
The following trends are shaping buyer behavior, based on insights from Bennett Thrasher’s Transaction Advisory Services practice, which supports the full transaction lifecycle for deals ranging from $20 million to $250 million in enterprise value.
- Quality is the No. 1 benchmark for buyers. While private equity firms, strategic buyers and lenders continue to pursue deals, the strongest interest is concentrated in businesses with recurring or highly repeatable revenue, strong customer retention, defensible margins, good cash conversion, manageable customer concentration and a clear path for continued growth. This is creating opportunities for relatively “unglamorous” essential businesses across industrial and technical services, specialty manufacturing, infrastructure, healthcare services and other specialized business sectors.
- EBITDA is just a starting point. Buyers are going deeper into the “economic machinery” underneath reported earnings, analyzing revenue and profitability by customer, service line, project, product, geography or other operating dimensions. They want to understand not only whether a company grew, but the factors driving that growth and whether those factors are sustainable.
- Interest in add-on acquisitions is making smaller businesses more attractive. Buyers are increasingly evaluating companies based on how they could fit into an existing platform, rather than whether they could serve as a standalone private equity platform. Smaller founder-owned businesses can be attractive acquisition targets because of their geographic presence, complementary customer base, specialized employees, new capabilities or service lines.
- Buyers are placing greater scrutiny on cash conversion and financial visibility. Dealmakers are favoring businesses that can grow without tying up large amounts of cash in working capital or capital expenditures. Two companies can report the same EBITDA but have very different economic profiles depending on how much cash they need to keep the business running and growing. Increasingly, the quality of a company’s financial infrastructure is becoming part of the investment thesis itself. Poor financial information doesn’t just make diligence more difficult; it creates uncertainty around what a buyer is underwriting, and that uncertainty can ultimately affect the speed, structure and value of a transaction. For sellers, identifying these issues before going to market can help reduce surprises during buyer diligence and provide greater control over how the financial story is presented.
- AI is changing how competitive advantage is evaluated. Rather than simply asking whether a company uses AI, buyers are looking at how the technology could change the way the business makes money, from improving employee productivity and margins or, conversely, making products and services easier to replicate. AI is also creating M&A opportunities beyond software, particularly in power, data centers, electrical infrastructure, engineering, and other businesses that support the AI economy.
Looking ahead, Bennett Thrasher expects middle-market M&A activity to continue broadening, while buyers remain more selective. Companies with reliable financial performance and reporting, strong cash conversion and a clear understanding of how AI may affect their competitive position should remain attractive to buyers.
“We continue to see significant activity across the lower middle market as companies seek outside capital to accelerate growth and some business owners consider outside investments as part of an exit or succession strategy,” said Stephens. “We are particularly well positioned to advise companies through the financial and strategic complexities that come with first-time institutional investment and the transition to a new ownership structure.”
From construction and real estate to restaurants, manufacturing and professional services, Bennett Thrasher specializes in integrated tax, audit and advisory support for middle-market and enterprise businesses. To learn more about the firm’s buy-side and sell-side M&A transaction services, visit btcpa.net.
About Bennett Thrasher
For more than 45 years, Bennett Thrasher has delivered strategic guidance and professional expertise to businesses and individuals through our tax, audit, advisory, and outsourcing solutions. Our people-first approach has positioned us among the largest and fastest-growing certified public accounting and consulting firms in the country and earned us recognition as an Inside Public Accounting (IPA) “Best of the Best” CPA firm in 2024 and 2025, as well as inclusion on Accounting Today’s Top 100 Firms list for the tenth consecutive year. Bennett Thrasher operates from our headquarters in Atlanta with additional offices in Dallas and Denver. We combine deep local knowledge with international reach as active members of DFK International, Leading Edge Alliance, and IR Global, enabling us to provide clients with comprehensive, globally informed solutions.
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