The M&A market in 2026 is defined by selectivity. Buyers have capital and appetite, but they're being careful about where they deploy it. Sellers have businesses to sell, but many are discovering that what they thought was worth in 2021 isn't worth that anymore.

We've advised on eleven transactions in the past twelve months—six buy-side, three sell-side, two that we walked away from during diligence. Here's what we're seeing.

Valuations Have Reset, But Not Everywhere

The easy money era is over. Median valuations for software companies are down 40% from their 2021 peaks. Growth-stage SaaS businesses that were trading at 15-20x ARR are now getting 6-8x. The market has repriced risk.

But that's the median. Outliers still command premium multiples. We advised on a sale in Q1 where a vertical SaaS business with $18M ARR exited at 11x revenue. Why? Because they had 118% net revenue retention, operated in a regulated industry with high switching costs, and had proven they could grow profitably.

The difference between median and premium valuations is execution. Businesses with strong unit economics, low churn, and clear paths to profitability are still getting attractive offers. Businesses that grew fast by burning cash are getting marked down or can't find buyers at all.

If you're planning to sell in the next 12-24 months, your valuation will depend less on your market and more on whether you can demonstrate sustainable growth and healthy margins. Revenue growth alone doesn't command a premium anymore.

Private Equity Is Buying, But Being Selective

PE dry powder is at an all-time high. Firms raised record amounts in 2023-2024 and need to deploy that capital. But they're not chasing deals the way they were three years ago.

The diligence process has gotten longer and more rigorous. Buyers are stress-testing revenue quality, customer concentration, competitive positioning, and management capability more carefully than they did during the boom. They're also building more conservative models—assuming lower growth rates, higher churn, and longer sales cycles than the target's projections.

We're seeing more deals fall apart in diligence. Issues that would have been negotiated away in 2021—customer concentration, key person risk, technical debt—are now deal-breakers. Buyers have options. If your business has meaningful risks, they'll move on to the next opportunity.

The deals that are closing share common characteristics: diversified customer base, strong management teams that will stay post-transaction, clean financials, and realistic growth expectations. If you have three customers that represent 60% of revenue, or your CEO is planning to retire, or your revenue recognition practices are creative, expect the process to be difficult.

Strategic Buyers Are Looking for Capabilities, Not Just Revenue

Strategic acquirers—companies buying to expand their product portfolio or enter new markets—are the most active buyers we're seeing. But they're not buying revenue. They're buying capabilities they can't build fast enough internally.

We advised a healthcare IT company on a sale where the acquirer paid a premium multiple not because of the target's current revenue, but because they had regulatory approvals and customer relationships in a segment the acquirer couldn't access on their own. The $12M in ARR was almost irrelevant—the value was in what it would have cost and how long it would have taken the acquirer to build those capabilities themselves.

If you're selling to a strategic buyer, your value isn't just your P&L. It's what you unlock for them. Do you have technology they need? Customer relationships in a market they want to enter? Regulatory approvals that take years to get? A team with specialized expertise?

The most successful sell-side processes we've run in the past year were the ones where we positioned the business around strategic value, not just financial performance. We identified what the acquirer was trying to build, showed them how the target accelerated that by 18-24 months, and framed the purchase price as the cost of speed.

Integration Is Where Deals Succeed or Fail

We're spending more time on post-close integration than we did three years ago, because that's where buyers are realizing they overpaid.

The business looked great in diligence. The model was sound. The deal closed. Then six months in, revenue is down, key employees have left, and the synergies that justified the price aren't materializing.

This happens because integration gets deprioritized or mishandled. Leadership assumes the business will keep running while they figure out how to combine operations. It doesn't. Customers get nervous. Employees get distracted. Competitors use the uncertainty to poach accounts.

The integrations that work are the ones where someone senior owns it from day one, decisions get made quickly even when they're unpopular, and the focus is on capturing value rather than keeping everyone happy.

We led an integration last year where the acquirer bought three businesses to roll into a platform. Eighteen months post-close, they were still operating separately and bleeding cash. We came in, made the hard calls—closed two facilities, eliminated overlapping roles, picked one system and retired the others, exited unprofitable customers—and delivered the synergies the firm had underwrote. It wasn't pretty, but it worked.

If you're acquiring a business, don't assume integration will happen naturally. It won't. You need a plan, you need dedicated resources, and you need someone with authority to make decisions that will upset people.

Smaller Deals Are Getting Done Faster

One trend we're seeing: deals under $50M are closing faster than larger transactions. Less committee oversight, shorter diligence timelines, simpler deal structures.

We closed a $23M acquisition in 90 days from LOI to close. The buyer was a family office, the target was a profitable services business, and both sides were pragmatic about risk allocation. Compare that to a $200M deal we're advising on that's been in diligence for seven months and still hasn't closed.

If you're a seller and speed matters—because you're burning cash, or facing competitive pressure, or need liquidity for personal reasons—smaller, entrepreneurial buyers are often better partners than large PE firms with lengthy approval processes.

What This Means for 2026

The M&A market isn't frozen, but it's disciplined. Deals are getting done, but only when the fundamentals are strong and the price is realistic.

If you're buying: Take your time. Don't skip diligence steps because you're worried about losing the deal. The best deals are the ones you walk away from when the risks don't justify the price.

If you're selling: Get your house in order before you go to market. Clean financials, diversified revenue, strong management team, realistic projections. The businesses that command premium valuations are the ones that don't give buyers reasons to discount.

If you're integrating: Don't underestimate how hard it is. The value you underwrote doesn't materialize automatically. You have to execute the integration with the same rigor you applied to the deal itself.

The market rewards quality and punishes sloppiness. If your business is well-run and you're realistic about valuation, this is still a good environment to transact. If you're hoping to get 2021 prices for a 2026 business, you're going to be disappointed.