Published on
February 15, 2026
How to Ensure M&A Deal Certainty in 2026
Explore key trends, strategies, and insights for ensuring M&A deal certainty in 2026, including AI integration, deal structures, and industry highlights.
Mergers and acquisitions (M&A) have always been a critical strategy for growth and transformation, especially for mid-market business leaders aiming to scale or exit effectively. In 2026, the dynamics of deal-making are more nuanced, with macroeconomic shifts, evolving industries, and technological advancements like AI playing pivotal roles. Based on the discussion with Frank Aquilla, a senior M&A partner at Sullivan & Cromwell, this article delves into the key trends shaping M&A activity, strategic considerations for buyers and sellers, and actionable guidance to ensure deal certainty in today’s market.
The Tale of Two Cities: M&A Trends in 2025 and Beyond
The past year was marked by stark contrasts in M&A activity, offering valuable lessons for 2026. Early 2025 saw a slowdown in deal-making due to uncertainties stemming from new policies and a cautious market. However, the second half of the year rebounded strongly, with a surge in activity dominated by mega deals - transactions exceeding $5 billion or even $10 billion in value. Notably, smaller and mid-market deals were less prevalent, as organizations prioritized strategic, high-stakes transactions that held significant long-term value for industries.
Why This Matters for Mid-Market Businesses
For mid-market entrepreneurs, this trend underscores the importance of strategic positioning. Buyers and sellers must focus on deals that address long-term growth and innovation rather than short-term financial engineering. Additionally, understanding pricing expectations and adapting to market realities is essential to remain competitive.
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The Changing Behavior of Buyers and Sellers
One of 2025’s defining themes was the shift in pricing expectations. Early in the year, many sellers demanded high premiums (up to 40%) based on inflated valuations. However, as the year progressed, sellers became more realistic, settling for premiums in the 20-25% range. This recalibration allowed deals to progress more smoothly.
Buyers, meanwhile, focused on strategic value rather than just price. They evaluated how potential transactions aligned with their long-term goals, such as industry leadership or technological innovation. This shift from purely financial considerations to strategic imperatives signals a critical mindset shift for all market participants.
Lesson for Entrepreneurs
- Be Flexible on Valuations: Overvaluing your business can deter potential buyers. Instead, assess realistic pricing metrics and consider highlighting the strategic value of your company.
- Strategize for Industry Relevance: Align your business with trends like AI, sustainability, or other transformational forces to enhance your appeal to buyers.
The Impact of Industry and Sector Trends
Certain industries stood out in 2025 for their robust M&A activity. Sectors like technology, healthcare, life sciences, and entertainment maintained consistent deal flow. However, a notable resurgence occurred in banking and financial institutions, a sector previously subdued since the financial crisis. This uptick was largely driven by the need to invest in AI capabilities, which smaller players often struggle to afford organically.
For regional banks and other small financial institutions, consolidation became a logical strategy for survival and growth. The same logic applied to other industries where AI was pivotal, as businesses sought acquisitions to remain competitive.
AI: A Game-Changer
AI’s role in M&A is twofold:
- Driving Transactions: Companies acquire AI capabilities (or talent) to remain at the forefront of their industries.
- Streamlining Deals: AI-powered due diligence accelerates deal execution and improves accuracy, allowing firms to assess risks and opportunities more efficiently.
Ensuring Deal Certainty: Key Considerations
For buyers and sellers, ensuring deal certainty requires more than agreeing on price. As Frank Aquilla explains, deal certainty involves addressing the following factors:
- Solid Financing: Buyers must demonstrate robust funding sources to avoid last-minute disruptions. Backup financing options are critical in case initial plans fall through.
- Regulatory Clearance: Regulatory approval is often the most significant obstacle. Proactively understanding and addressing potential roadblocks can expedite the process.
- Board Alignment: Both buyers and sellers must ensure their boards are fully informed and aligned throughout the deal process. Regular updates and strategic discussions with board members prevent last-minute surprises.
- Day-One Integration Planning: Deals often fail when buyers focus solely on closing rather than the integration process. Having a clear post-deal implementation plan ensures value creation begins immediately.
Evolving Deal Structures: Bridging Valuation Gaps
One innovative approach gaining traction is the use of contingent value rights (CVRs). CVRs allow buyers and sellers to bridge valuation gaps by tying additional payouts to the future performance of the acquired business. For instance, in biopharma or AI acquisitions, buyers may agree to pay an extra $5-$10 per share if specific milestones are achieved within two to three years.
Why CVRs Matter
- For Sellers: CVRs offer the chance to capture the full value of a high-potential business.
- For Buyers: They mitigate overpayment risks by ensuring payouts are tied to actual performance.
Strategic and Tactical Insights for 2026
As we enter 2026, M&A activity appears poised to continue its momentum. Key drivers include technological innovation, geopolitical developments, and evolving macroeconomic conditions. For mid-market executives, staying prepared is essential to capitalize on opportunities.
Steps to Maximize M&A Readiness
- Secure Funding Relationships: Build strong partnerships with financial institutions and private credit providers to ensure quick access to capital.
- Anticipate Regulatory Challenges: Engage with regulators early in the process to address potential concerns proactively.
- Maintain Board Engagement: Keep your board informed and involved from the early stages of deal planning to ensure smooth decision-making.
- Leverage AI in Due Diligence: Invest in AI tools to streamline deal evaluation and enhance data analysis.
Key Takeaways
- Mega Deals Dominate: In 2025, large strategic transactions outpaced smaller deals. Mid-market businesses must focus on aligning with industry trends to attract buyers.
- AI is Transforming M&A: From driving acquisitions to optimizing due diligence, AI has become a critical factor in deal-making.
- Realistic Pricing is Key: Sellers must adjust their expectations to reflect market conditions. Buyers should emphasize long-term strategic value.
- Deal Certainty Requires Preparation: Focus on solid financing, regulatory planning, and integration strategies to ensure success.
- Contingent Value Rights Bridge Gaps: CVRs offer a flexible solution for addressing valuation disagreements, particularly in high-growth sectors.
For business leaders navigating the complexities of 2026’s M&A landscape, adaptability and preparation are paramount. By embracing these insights, mid-market entrepreneurs can position themselves for successful transactions that drive long-term value.
Conclusion
M&A activity in 2026 reflects a rapidly evolving business environment where strategy, technology, and preparation intersect. For mid-market companies, the lessons from recent trends are clear: prioritize strategic transactions, leverage technology, and ensure deal readiness at every stage. Whether aiming to scale, consolidate, or innovate, these principles will be invaluable in navigating the opportunities and challenges of the modern M&A landscape.
Source: "Frank Aquila on 2026 M&A Trends: Megadeals, AI, Pricing Discipline & Deal Certainty" - New to The Street TV, YouTube, Jan 7, 2026 - https://www.youtube.com/watch?v=gUVsnpqCm6Q
