Five M&A signals accounting leaders should watch in 2026

Published April 13, 2026 12:55 PM

1 Min Read

If you've been waiting for the M&A market to fully reopen, you're not alone — and you're not wrong to be patient. But patience has a shelf life, and 2026 may be the year that runs out.

The middle market isn't frozen. It isn't roaring, either. The best word for what we're seeing right now is choppy — and for accounting leaders and CFOs advising business owners on exit readiness, choppy markets are often more consequential than calm ones. They reward preparation and punish hesitation.

Here are five signals worth paying close attention to this year.

1. The floodgates aren't open — but the pressure is building

Water rushing through the gates at a hydroelectric dam

Michael Swensen/Getty Images

A number of companies went to market at the end of 2025 and still haven't closed. That's not a sign of a broken market — it's a sign of a cautious one. Buyers have the capital. Private equity firms are sitting on significant dry powder, continuing to raise funds, and actively looking for quality assets. The problem? Quality assets at the right price remain elusive.

That mismatch — abundant capital chasing limited quality deal flow — creates a specific kind of market tension. It keeps valuation expectations elevated on the sell side while pushing buyers to be more selective and deliberate. For advisors, the takeaway is straightforward: This isn't a market where deals close themselves. Preparation and presentation matter more than ever, and sellers who aren't transaction-ready will keep getting passed over.

2. Pre-LOI diligence is becoming standard practice

One of the more meaningful shifts we're seeing in 2026 is a change in when buyers want answers. Traditionally, a signed letter of intent was the starting gun for due diligence. That's no longer always the case.

More frequently now, buyers are approaching sellers and asking a version of the same question: "I want to believe your numbers — but before I put an offer on paper, can someone verify we're in the same ballpark?"

What's emerging is a kind of "Quality of Earnings lite" — a more focused, pre-LOI review designed to give a buyer enough confidence to write a real offer without committing to the full diligence process upfront. It's not exhaustive, but it's serious. And it signals something important about how buyers are thinking right now: They want deals, but they want them at the right price, and they're not willing to burn six to eight weeks of internal resources on a target that turns out to be misrepresented.

Here's what makes this particularly interesting from a service perspective: It's almost always a two-parter. Once pre-LOI diligence confirms the deal is real, and an offer is accepted, the buyer's lender typically requires a full Quality of Earnings report before financing is approved. That means advisors end up serving two principals — the buyer client and the bank — and the scope of work effectively doubles.

For firms that provide transaction advisory services, this trend creates both an opportunity and a responsibility. The opportunity is obvious. The responsibility is to be clear with clients about how this sequenced process works and what each phase involves.

3. Corporate carve-outs are on the rise

Not every seller wants to sell everything.

We're seeing more business owners come to market not with a company, but with a piece of one — a non-core brand, a division, a business unit they've decided doesn't fit the strategy going forward. Sometimes that decision is driven by a strategic review. Sometimes it's a buyer who expresses interest in just one component. But more often than not, the seller makes the call: "This part of my business isn't core to what we're building, and it's worth more to someone else than it is to us."

That's a legitimate and often sound business decision. But it creates a distinct set of accounting challenges that many sellers aren't prepared for.

To bring a carved-out business unit to market effectively, you have to be able to show it as a standalone entity. That means separating shared costs, allocating revenue and expenses that may have always been reported on a consolidated basis, establishing what a buyer would actually be acquiring — and presenting all of it in a way that allows a prospective purchaser to underwrite the deal with confidence.

If your clients are exploring partial exits, don't underestimate the complexity — or the lead time — involved in getting there.

4. The baby boomer wave is real and still rolling

Demographic transitions don't move in straight lines, but the trend is unmistakable. Across the middle market, we're working with business owners who have been talking about selling for five, 10, even 15 years — and haven't done it yet. No family succession plan, no buyer lined up, no transaction on the horizon. And now they're in their late seventies or early eighties.

This isn't just a human story (though it is that). It's a planning story. Businesses that reach the market without adequate preparation — financial records that aren't clean, ownership structures that haven't been updated, customer concentration risks that haven't been addressed — are going to struggle to attract buyers or achieve fair value. They've been putting off the work because the exit always felt like something they'd get to later.

For accounting and advisory teams, the opportunity here is to get ahead of that conversation. Don't wait for a client to say they're ready to sell. Ask the question now. A little preparation spread over two or three years is worth far more than a compressed push when the window is already closing.

5. Deal readiness matters more than market timing

Zsolt Nyulaszi/nyul - stock.adobe.com

This is probably the most important signal on the list, and the hardest one to sell to clients who are waiting for the right moment.

Middle market sellers are remarkably consistent in their capacity to find reasons not to sell. Interest rates are too high. Tariffs are creating uncertainty. The economy feels wobbly. Oil prices are up. There's an election coming. There's always something — and in fairness, some of those concerns are legitimate. But for many owners, macro uncertainty functions less as a genuine obstacle and more as a permission slip to delay a decision they're not emotionally ready to make.

The problem with that logic is that you can't time M&A markets the way you'd time a stock trade. When conditions shift — and they can shift quickly — buyers who are ready to move will capture the premium, and sellers who waited for the perfect moment will still be getting ready.

What does readiness actually look like? It means clean financials, ideally audited or reviewed, going back at least two to three years. It means understanding your adjusted EBITDA and being able to defend it. It means knowing your customer concentration, your contract terms, your key-person dependencies. It means having your corporate structure reviewed and your ownership documentation in order. And if a carve-out is part of the plan, it means starting that process well before you need it.

None of that happens overnight. It also doesn't require a seller to commit to a transaction — it simply means they'll be positioned to move when the moment is right rather than scrambling to get ready after the fact.

What accounting leaders can do right now

The professionals in the best position to help clients navigate this market aren't the ones waiting for a transaction to start the conversation — they're the ones who've already been having it.

Whether that means conducting a readiness assessment, helping a client understand what a carve-out would require, or walking through what Quality of Earnings scrutiny actually looks like, the value you bring as an advisor is highest before the deal clock starts. Use the choppiness of this market to build that foundation with your clients.

When the floodgates do open, you'll want to be ready — and so will they.