Q4 2025 Market Update:
Business Transactions
in the $1–10 Million Range

Introduction

This report examines M&A activity in the U.S. market for companies with enterprise values between $1-10M. It leverages Q4 2025 data from IBBA,  BizBuySell, DealStats, and internal insights from Calder Capital’s Sell-Side and Buy-Side teams. Companies in this range are typically established businesses that appeal to strategic acquirers, private investors, and lower middle market financial buyers.  

$1-5M

Market Activity and Sentiment

Deal Volume Trends

Dan Duba, Buy-Side M&A Advisor at Calder Capital, stated, “The fourth quarter of 2025 closed with a market characterized by strong buyer demand alongside widening performance gaps across industries.” While BizBuySell reported approximately 2,300 closed transactions, government shutdown–related lending disruptions slowed activity late in the quarter and pushed many closings into early 2026. We also saw the fastest median days‑on‑market since 2017 at 149 days, a dynamic that, in our experience, tends to intensify buyer competition for high‑quality businesses. DealStats valuation data supports this selective environment, with median private‑company EBITDA multiples settling around 3.5x in Q4 2025, reflecting disciplined but stable pricing for quality assets. 

Businesses priced under $2M were the most pursued targets within the $1-5M segment. BizBuySell noted that service business median sale prices increased approximately 13%, reflecting strong buyer demand for stable, cash‑flowing, service‑based businesses. 

In contrast, manufacturing businesses in the $1–5M segment experienced meaningful year-over-year declines. BizBuySell reported a 23% drop in median sale prices and an 18% decline in median revenue, driven by tariffs, supply chain disruption, and elevated energy costs. These pressures also contributed to longer due diligence timelines and more conservative underwriting for asset-heavy and import-dependent companies. 

Overall, Q4 deal volume in the lower middle market increased, but execution slowed for businesses facing margin compression or operational uncertainty. 

Market Direction

Strategic buyers, financial buyers, and individual buyers remained active throughout Q4, particularly in B2B services, trades, and other traditionally recession resistant categories (IBBA). Buyer interest was buoyed by interest rates that fell three times in 2025, strong liquidity, and a growing pool of corporate professionals pursuing business ownership. 

Seller activity improved modestly, but valuation expectations continued to create friction in some processes. Some owners remained hesitant to go to market due to uneven 2024–2025 financials, while many others are choosing to engage with direct buyer inquiries, without full market exposure. 

Heading into 2026, sales momentum in the $1–5M segment will depend on continued rate stability or cuts, clearer tariff direction, and improved seller readiness. 

Buyer & Seller Conditions

According to the IBBA Market Pulse Report: 

$1-2M Segment (IBBA Q4 2025) 

• 52% of buyers were first‑time buyers
• 45% were “buying a job”
• 31% pursued horizontal add‑ons
• 49% of buyers were within 20 miles of the seller

$2-5M Segment (IBBA Q4 2025) 

• 24% were strategic acquirers
• 22% were serial entrepreneurs
• 36% pursued horizontal add‑ons
• 46% were local or regional buyers, though national interest increased due to virtual dealmaking 

Across both segments, buyer types continued to diversify. Funded searchers, family offices, and non‑traditional PE‑backed platforms remained increasingly active, especially in essential services and recurring revenue businesses. 

Scott Nicholson, Sell-Side M&A Advisor at Calder Capital noted, “Seller confidence showed modest improvement in the fourth quarter, though it remains below pre‑2023 levels. The $1-2M market continues to favor sellers, with sale‑to‑benchmark ratios holding near 94%. That said, ongoing uncertainty around tariffs, inflationary pressures, and potential SBA policy changes has kept many business owners cautious despite favorable market dynamics.” 

Buyer sentiment remained strong. BizBuySell reported that nearly half of buyers identified as corporate refugees, many driven by layoffs, burnout, or concerns about AI‑driven job displacement. These buyers were highly motivated but increasingly selective. 

Deal Structure and Financing

Max Friar, Managing Partner and Founder of Calder Capital stated, “What we saw toward the end of 2025 was the market adjusting in real time. Financing tightened and buyers leaned harder into certainty, which showed up in consideration structure. DealStats data indicates down payments increased on average, while seller financing and earnouts represented a smaller share of total consideration. At the same time, lender selectivity remained high, so even when the consideration mix skewed more cash-heavy, deal execution still required discipline and careful underwriting.” 

SBA 7(a) loans remained the backbone of financing in this range, but stricter SBA guidelines contributed to processing delays and narrower buyer eligibility. Many buyers, if they can, are shifting toward non‑bank SBA lenders to avoid bottlenecks (BizBuySell). 

While interest rates remained elevated, credit conditions tightened and lenders became more selective, particularly around businesses exposed to tariffs or margin pressure. As a result, buyers and sellers increasingly relied on structured terms, including seller notes, earnouts, and targeted price adjustments, to bridge valuation gaps and keep transactions financeable. BizBuySell’s Q4 report reinforces that dynamic: 45% of brokers said lending conditions made deals harder to complete. 

Economic Context

Q4 Evaluation

The $1–5M segment ended 2025 in a market defined by cost pressure, increasingly selective buyer demand, and widening performance gaps across industries. Sam Scharich, Buy-Side Managing Director, at Calder Capital, noted, “As we closed out 2025, the $1-5M segment was defined by sustained cost pressure and more selective buyer demand. Many business owners continued to face elevated labor, materials, and shipping costs, which tightened operating margins and widened the performance gap across industries. In our experience, that environment has made buyers more disciplined, with a clear preference for businesses that have proven they can perform well despite these pressures.” 

These pressures translated into slower deal velocity for tariff‑exposed businesses and deeper diligence from lenders and buyers across the board. In contrast, service‑based companies (especially home services, B2B services, and recurring revenue models) outperformed in sales price and demand. BizBuySell reported that service business median cash flow rose 7%, reflecting strong buyer appetite for stable, essential, and locally anchored businesses. 

Deal execution accelerated for companies with thorough financials, strong cash flows, and those with a management team in place. Median days on market for these types of businesses fell to 149 days, the fastest pace since 2017, as buyers competed aggressively for well-operated listings. However, weaker performers faced extended timelines and valuation pressure as buyers tested margin durability and operational resilience. 

Q1 Forecast

Looking ahead to Q1 2026, activity in the $1–5M segment is expected to remain steady, though highly dependent on financing execution. Buyer demand continues to be driven by individual and first-time acquirers, particularly for service-oriented and locally anchored businesses. However, SBA-related delays, lender scrutiny, and tighter qualification standards are likely to continue influencing deal timelines and overall transaction certainty. As a result, successful closings will increasingly favor well-prepared businesses with clean financials and realistic valuation expectations, while sellers who remain flexible on structure may see improved outcomes in a more execution-sensitive environment. 

$5-10M

Market Activity and Sentiment

Deal Volume Trends

Q4 2025 brought a selective but active environment for the $5–10M segment. While overall small business transactions increased 3% year‑over‑year, the upper end of the lower middle market experienced slower execution due to tariff exposure, cost inflation, and tighter underwriting. 

Jim Oren, Buy-Side M&A Advisor at Calder Capital noted, “Manufacturing and industrial businesses felt some of the strongest headwinds as we moved through the end of 2025. We saw softer pricing, pressure on revenue and cash flow, and that naturally led to longer diligence cycles and more structured offers. Buyers didn’t step away, but they became more deliberate, especially in capital-intensive industries where performance variance widened materially.” 

Market Direction

Valuation expectations remained elevated throughout the period, reflecting sustained seller confidence despite shifting market dynamics. At the same time, more sellers demonstrated a willingness to consider flexible deal structures, including earnouts, seller financing, and other contingent elements, to address heightened buyer risk sensitivity. This shift suggests a growing recognition among sellers that while pricing expectations have held, execution increasingly depends on aligning transaction terms with buyer underwriting requirements and prevailing financing conditions. 

Buyer & Seller Sentiment

The $5–10M segment continued to be a strategic sweet spot for financial buyers and corporate acquirers, despite macroeconomic pressures. Buyers were drawn to companies with larger teams, stronger systems, and more predictable earnings which are characteristics more common in this range than in smaller transactions. 

However, acquisition criteria tightened meaningfully in Q4. Buyers placed increased weight on: 

• Margin durability 
• Recurring or contracted revenue
• Low customer concentration
• Supply chain resilience
• Low tariff exposure and sourcing diversification 

Businesses that met these criteria saw competitive processes and premium valuations. Those with uneven financials or tariff exposure faced valuation pressure and extended diligence. 

Seller sentiment improved modestly in Q4 but remained below pre‑2022 highs. According to the IBBA, sellers were more willing to engage, but only if their 2024 and 2025 financials had recovered from prior year softness. 

Buyer demand remained strong. Private equity groups, independent sponsors, and corporate strategics continued to pursue add‑ons and scalable platforms, particularly in essential services, infrastructure, and niche manufacturing. Service‑based businesses outperformed other businesses for sale, with median sale prices rising 13% and strong buyer competition for companies with recurring revenue and defensible margins. 

Deal Structure and Financing

Garrett Monroe, Sell-Side Managing Director at Calder Capital, stated, “In the $5–10M range, deal structures remained relatively stable through Q4. While buyers continue to prioritize cash at close, transactions increasingly incorporate structured elements to align on value. IBBA data reflects this balance, with cash at close averaging about 80–85% and seller financing typically accounting for roughly 10–15% of consideration. Equity rollovers were also more common at this level, particularly in private‑equity‑led transactions, as buyers and sellers worked to align around long‑term value.” 

In Q4, more sellers became open to partial rollovers and structured earnouts to bridge valuation gaps and address buyer concerns around tariffs, supply chain risk, and margin compression. 

Traditional SBA financing became less prevalent in the $5–10M segment, as buyers increasingly relied on conventional senior debt, mezzanine capital, and private credit solutions. Longer SBA processing timelines in early 2025 also contributed to a shift toward more flexible financing structures.  

Commercial deal rates remained elevated, typically ranging from, depending on sector risk. Underwriting was tightest in manufacturing and distribution, particularly for businesses exposed to tariff volatility. 

“When a business has clean financials, durable margins, and a strong operational backbone, the market responds aggressively,” noted Calder’s Buy-Side M&A Advisor, Pankaj Rajadhyaksha.

Economic Context

Q4 Evaluation

Collin Hicks, Buy-Side Associate at Calder Capital stated, “The $5–10M segment faced similar macro pressures as the broader lower middle market, with capital-intensive businesses seeing greater valuation pressure. DealStats data showed EBITDA multiple compression in manufacturing and industrial sectors relative to asset-light service businesses.” 

Q1 Forecast

In the $5–10M segment, Q1 2026 is expected to reflect a more selective but still active market. Buyer demand remains supported by a mix of strategic acquirers, independent sponsors, and smaller private equity groups, though underwriting standards remain disciplined. Financing conditions are likely to remain a moderating factor, but less restrictive than in smaller transactions, allowing deals with strong fundamentals to move forward. At this level, buyers continue to balance cash at close with modest structural elements, including limited seller participation or performance-based adjustments, to bridge valuation expectations. Companies demonstrating scale, consistent margins, and operational maturity are expected to attract the most interest as the year begins. 

Disclaimer

This Market Update is provided for informational purposes only and does not constitute legal, financial, investment, or other professional advice. The information contained herein is based on sources believed to be reliable; however, Calder Capital makes no representations or warranties, express or implied, as to the accuracy, completeness, or timeliness of the content. Market conditions are subject to change without notice, and past performance is not indicative of future results. Readers are advised to consult with their professional advisors before making any business or investment decisions. Calder Capital expressly disclaims any and all liability that may be based on the information contained in this report.

Q4 2025 Market Update:
Business Transactions
in the $10-25 Million Range

Introduction

This report analyzes market conditions for U.S. businesses transacting at enterprise values between $10-25M. Insights are drawn from Q4 2025 data compiled by KeyBank Capital Market Reports, IBBA’s latest Market Pulse Report, PitchBook, Plante Moran data, and Calder Capital’s Sell-Side and Buy-Side teams as of March 2026.

$10-25M

Market Activity and Sentiment

Deal Volume Trends

Jared Friar, Sell-Side M&A Advisor at Calder Capital stated, “M&A activity in the $10–25M segment appears to be increasing in volume in service, manufacturing, construction, distribution, and infrastructure-related businesses” (PitchBook). 

PitchBook reported that North American M&A activity reached 19,503 transactions in 2025, with deal value exceeding $878 billion in Q4 alone, reflecting a strong resurgence in overall deal activity. While this data spans all transaction sizes, it underscores broader market momentum that appears to be carrying into the $10–25M segment. 

Calder’s Q4 results show that the firm’s lower middle market activity remained strong through year-end.  

Market Direction

KeyBank’s Middle Market Sentiment report (Q4 2025 data) indicates that while companies entered year-end with strong operational confidence, broader macro sentiment remained more cautious. Their survey found that 77% of middle market leaders rated their company’s 12-month outlook as excellent or very good, while only 52% viewed the U.S. economic outlook as similarly favorable. KeyBank attributes this divergence to company-level execution—improvements in efficiency, technology, pipeline strength, and team stability—rather than external conditions. As they note, “with tariffs, inflation, interest costs, and labor pressures still live, leaders are pairing growth plans with contingency playbooks and tighter operating discipline.” 

In the $10–25M segment, this dynamic continues to shape buyer behavior. Buyers remain active but are highly selective, placing greater emphasis on businesses that demonstrate strong control over margins, visibility into forecasting and backlog, and consistent operational execution. Companies that can clearly show progress in efficiency initiatives, technology adoption, and team development are more likely to command competitive interest and favorable terms. 

Supporting this trend, Sam Scharich, Buy-Side Managing Director at Calder Capital, notes, “Based on Calder’s experience in the market, distribution deal activity has declined year-over-year, while strategic acquirers continue to represent the majority of buyers in this space as they pursue scale, new capabilities, and long-term positioning. More broadly, industrial manufacturing remained an area of relative strength late in the year.” Plante Moran reported 81 announced U.S. industrial manufacturing transactions in Q4 2025 (up from 77 in Q3 2025), indicating continued momentum in the sector. While this data spans all deal sizes, it aligns with sustained buyer interest in scaled, well-run manufacturing businesses within the $10–25M segment. 

Buyer & Seller Conditions

Andy Garza, Buy-Side Associate at Calder Capital noted, “across the market, we are finding that buyers are deploying capital more selectively and conducting deeper diligence, which is lengthening timelines.”  

IBBA’s Q4 2025 Market Pulse states that for lower middle market transactions, average offers per deal declined from 3.89 in 2024 to 3.61 in 2025, suggesting that buyer interest remained high but deals garnered less competition than the prior year. IBBA’s summary captures this dynamic well: “Momentum is building, but it’s not a rush. 2026 looks more like a continuation of disciplined dealmaking than a reset to the frenzy years.” 

At Calder, however, we continue to see robust buyer engagement, with many processes still generating 15+ qualified offers for well-positioned businesses, highlighting sustained demand for high-quality opportunities even as broader competition levels moderate. 

Scharich stated, “Buyer sentiment remained strong in Q4 2025. Calder’s Buy-Side client base grew from 41 to 73 during 2025, showcasing strong demand for proprietary opportunities as buyers faced limited sell-side inventory and fatigue with crowded auction processes.” 

Deal Structure and Financing

Max Friar, Managing Partner and Founder of Calder Capital stated, “Financing conditions improved in 2025, supported by multiple Federal Reserve rate cuts. While this created a more constructive backdrop for buyers, it did not translate to easier access to leverage. Smaller transactions, in particular, remain subject to heightened lender selectivity.” 

Friar continued, “Prepared sellers with organized documentation continue to be better positioned to reduce iterative information requests, preserve deal momentum, avoid valuation pressure, and limit risk leading to closing.” 

Economic Context

Q4 Evaluation

Garrett Monroe, Sell-Side Managing Director at Calder Capital noted, “Moving forward into the next few quarters, we expect buyers will continue to press harder on customer concentration, labor exposure, tariff risk, supplier reliability, AI disruption, and the credibility of forward-looking projections.” 

Overall, in Q4, buyers remained active, and capital flowed toward businesses with steady earnings, clean financial documentation, and defendable sales pipelines. Companies in sectors tied to infrastructure, automation, reshoring, AI, data centers, and mission-critical services were, and continue to be, in high demand.  

Industrial manufacturing activity was one of the clearer bright spots in Q4, with Plante Moran  

reporting 81 announced U.S. transactions, up from 77 in Q3 2025 and 14.1% above Q1 levels. While this data reflects activity across all transaction sizes, it highlights continued momentum in the sector that is also being observed within the $10–25M segment. 

Plante Moran reported that global distribution-based company transactions totaled 131 in Q4 2025, down from 205 in Q4 2024, while U.S. activity declined to 56 in Q4 2025 from 88 in Q4 2024. 

Q1 Forecast

Looking ahead to Q1 2026, activity in the $10–25M segment is expected to remain constructive, though unevenly paced as buyers continue to approach opportunities with a disciplined underwriting mindset. Buyer demand remains present across strategic acquirers and private equity-backed platforms, supported by continued capital availability and pressure to deploy. However, transactions are increasingly dependent on quality, with buyers placing greater emphasis on margin durability, scalability, and operational consistency. 

While broader lower middle market conditions have stabilized, deal execution in this segment is likely to reflect a more selective environment, where well-prepared companies continue to attract strong interest while others face extended timelines or pricing pressure. As a result, Q1 activity is expected to favor businesses that can clearly demonstrate performance consistency and operational maturity, reinforcing a market that remains active but increasingly differentiated by quality. 

Disclaimer

This Market Update is provided for informational purposes only and does not constitute legal, financial, investment, or other professional advice. The information contained herein is based on sources believed to be reliable; however, Calder Capital makes no representations or warranties, express or implied, as to the accuracy, completeness, or timeliness of the content. Market conditions are subject to change without notice, and past performance is not indicative of future results. Readers are advised to consult with their professional advisors before making any business or investment decisions. Calder Capital expressly disclaims any and all liability that may be based on the information contained in this report.

Q4 2025 Market Update:
Business Transactions
in the $25–100 Million Range

Introduction

This report examines M&A activity in the U.S. market for companies with enterprise values between $25-100M. It leverages Q4 2025 data from KeyBank, DealStats, PitchBook, and internal insights from Calder Capital’s Sell-Side and Buy-Side teams. Companies in this range are typically mature, professionally managed, and appealing to both institutional investors and strategic acquirers. 

$25-50M

Market Activity and Sentiment

Deal Volume Trends

Aidan Cote, Buy-Side Search Director at Calder Capital, stated, “While overall transaction volume softened in Q4 2025, average deal values remained elevated due in part to a small number of larger transactions. Buyer interest in the $25–50M market remained active, though capital deployment became more selective, with increased emphasis on scale, earnings stability, and operational performance.” 

PitchBook data shows that global M&A activity in 2025 followed a ‘value up, volume down’ pattern, with total deal value increasing while overall deal count declined. While this data spans all transaction sizes, it reinforces a broader market trend toward larger, more selective transactions. This is a dynamic that is also observed within the $25–50M segment. 

Market Direction

The outlook for late 2025 remained cautiously constructive. KeyBank data shows that operational execution continued to drive confidence, with 66% of middle market firms citing improved efficiency, 57% pointing to technology advancements, and 51% referencing automation and AI adoption as key contributors. In the $25–100M segment, these initiatives are especially important, as buyers increasingly reward scalability, process maturity, and repeatability with stronger valuations. 

As 2026 began, company-level confidence remained elevated, with 77% of leaders rating their 12‑month outlook as “excellent” or “very good.” However, valuation trends in this segment continued to reflect a clear “quality premium” dynamic. Data from PitchBook indicates that EBITDA multiples in the $25–100M range held at meaningfully higher levels than the broader lower middle market, with outcomes increasingly dependent on factors such as size, growth profile, margin consistency, and depth of management. 

Rather than compressing uniformly, valuations remained resilient for well-positioned assets, while more challenged or less scalable businesses faced greater scrutiny. This dispersion highlights a market that remained active into year-end, but increasingly selective in how value was assigned. 

Buyer & Seller Conditions

Buyers remain engaged, but underwriting remains selective due to ongoing macro pressures including tariffs, inflation, interest costs, and labor constraints.  

Marc Blom, Sell-Side M&A Advisor at Calder Capital stated, “There’s a sense of confidence among sellers right now. We’re seeing companies that are more operationally disciplined, more focused on margins, and better prepared to explain how they have performed pre-COVID, during COVID, post-COVID, and in the current tariff environment. Buyers, on the other hand, are taking a closer look during due diligence, largely given the continued pressure on costs and shifting federal policies. The sellers who can walk through their performance with clarity and demonstrate stability and growth potential are the ones that continue to generate strong interest and achieve very favorable outcomes.” 

Deal Structure and Financing

Transaction structures in the $25–100M segment continued to reflect a focus on certainty, but also increased flexibility in how deals were constructed. While buyers still prioritize strong cash at closing, transactions at this level more frequently incorporate structured components, including rollover equity, selective seller participation, and, in certain cases, earnouts, to align incentives and bridge valuation expectations. As deal sizes increase, capital structures tend to become more nuanced, particularly in private equity-backed transactions, where maintaining alignment post-close is often a key consideration. 

KeyBank’s capital posture data shows a split between firms maintaining current access to capital (57%) and those seeking increased access (43%), indicating many buyers are prepared to fund growth while others remain cautious. When external capital is needed, KeyBank reports the most common internal levers are improving cash flow management (67%) and cost reduction (58%), reflecting continued discipline and a preference to strengthen fundamentals before stretching for acquisitions. 

Ben Sundquist, Buy-Side Search Director at Calder Capital, noted, “We’re seeing buyers place a greater emphasis on clarity, preparedness, and risk mitigation in today’s market. Buyers are scrutinizing opportunities more carefully, and sellers who are organized, realistic about valuation, and open to thoughtful structuring are putting themselves in the best position for successful outcomes.” 

Deal term data from the same source shows that in 2025 year-to-date, the median noncompete length was 36 months with a 25-mile radius, reinforcing that standardized protections remain common and are typically structured with multi-year duration. 

Until then, most buyers in the $25–50MM EV segment are operating under conservative underwriting assumptions, heavier equity loads, and tight lender scrutiny. This dynamic is contributing to lower overall deal volume in the lower middle market, compared to upper-tier deals where scale, certainty, and institutional interest attract more aggressive financing.

Economic Context

Q4 Evaluation

By late 2025, operating discipline remained a defining theme, but some friction points eased. KeyBank noted supply chain impact fell to 19% in Q4 2025 from 27% in Q2 2025, and expected impact declined as well (21% vs. 26%), suggesting logistics pressure was less acute than earlier in the year. At the same time, investment priorities stayed focused on modernization: firms most often cited expanding AI and tech investments (53%) and upgrading infrastructure/equipment (43%) as top uses of capital, underscoring how productivity initiatives are shaping planning into 2026. 

Q1 Forecast

Looking ahead to Q1 2026, activity in the $25–50M segment is expected to remain constructive, supported by continued capital availability from private equity and strategic buyers. However, transaction activity is likely to progress at a measured pace, as buyers maintain a disciplined underwriting approach following the volatility of the past few years. 

At this level, buyers are placing increased emphasis on scale, margin durability, and operational depth, with a clear preference for businesses that demonstrate consistent performance and strong management teams. While demand remains present, transactions are increasingly differentiated by quality, with well-positioned companies continuing to attract competitive interest, while others may experience longer timelines or increased scrutiny during diligence. Overall, Q1 2026 is expected to reflect a stable but selective market environment, where preparation and execution remain key to achieving successful outcomes. 

$50-100M

Market Activity and Sentiment

Deal Volume Trends

In the $50–100MM EV segment, late-year activity continued to reflect a ‘flight to quality,’ with larger platforms better positioned to clear diligence and financing hurdles. PitchBook’s quarterly totals show that global M&A value remained elevated into Q4 2025, with North American deal value reaching approximately $800.3 billion. While this data reflects activity across all transaction sizes, it highlights continued capital concentration in scaled opportunities, a dynamic that is also evident within the $50–100M segment. 

Max Friar, Managing Partner and Founder of Calder Capital, noted, “Even in a more selective market, there is still strong demand for businesses that demonstrate operational stability, experienced management, and clear growth potential. Buyers remain disciplined in how they evaluate opportunities, but well-prepared companies with scalable infrastructure continue to attract meaningful interest and are often able to move through diligence and financing processes with greater efficiency and confidence.”

Market Direction

In Q4, the market reflected strong company-level confidence tempered by a more cautious macro outlook. KeyBank’s survey findings show that just over half of respondents (52%) rated the U.S. economic outlook positively, suggesting a more measured view of macro conditions even as businesses continued to execute and invest. On the financing side, larger companies appeared more proactive, with 69% of firms in the $500M–1B annual revenue range reporting efforts to increase access to capital, reinforcing that well-scaled platforms remained positioned to pursue acquisitions when opportunities met underwriting standards. 

Buyer & Seller Conditions

Buyer appetite remained present in Q4, though participation continued to unfold unevenly. KeyBank’s February 2026 M&A expectations, reflecting sentiment exiting Q4, show that buyers were generally positioned to act ahead of sellers, with more respondents indicating near-term buy-side activity than sell-side readiness. This timing gap is consistent with larger transactions, where acquirers often begin positioning and capital deployment earlier while some sellers delay bringing assets to market amid macro uncertainty. 

In his 2025 Buy-Side M&A Recap, Sam Scharich, Buy-Side Managing Director at Calder Capital, noted, “What continues to stand out in today’s market is that strong acquisition opportunities are still being created through disciplined sourcing, direct outreach, and consistent execution. Many of the most successful transactions are happening off market, where buyers are able to build relationships directly with owners and move strategically when the right fit emerges. Even in a competitive environment, buyers who stay focused, prepared, and persistent are continuing to find meaningful opportunities across manufacturing, business services, infrastructure, and industrial sectors.”  

Deal Structure and Financing

Deal structures in the $50–100M segment increasingly incorporated tailored deal structure elements, including rollover equity, negotiated escrow terms, and selective use of contingent consideration, to bridge valuation gaps and align post-close incentives. The result is a more diligent transaction environment for buyers and sellers in this range. Clarity and preparation early in the process remain critical; overall deal structures in this range are more customized to reflect company-specific risks, performance expectations, and ownership objectives. 

Economic Context

Q4 Evaluation

The macro environment continues to influence diligence priorities and risk structuring. Inflation and trade-related pressures remain the most cited operational challenges, with labor costs and interest rates close behind, reinforcing why buyers in larger transactions apply deeper scenario planning and place greater weight on margin durability. At the same time, KeyBank’s data indicates capital allocation remains focused on modernization and growth, led by increased investment in AI and technology (53%) alongside continued emphasis on cybersecurity and risk management (39%). Together, these trends highlight that operational resilience and system investment remain critical factors in reinforcing buyer confidence when clearly reflected in financial performance. 

Q1 Forecast

In his 2025 Sell-Side M&A Recap, Garrett Monroe, Managing Director – Sell-Side at Calder Capital commented, “As we head into 2026, we’re continuing to see strong demand for well-positioned businesses across a wide range of industries, particularly in manufacturing, industrial services, infrastructure, and business services. Buyers remain active and capital continues to be available for quality opportunities, but the market is rewarding preparation and operational strength more than ever. Sellers who understand their value drivers, invest in planning early, and approach the process strategically are putting themselves in the best position to achieve successful outcomes in a competitive environment.”  

Disclaimer

This Market Update is provided for informational purposes only and does not constitute legal, financial, investment, or other professional advice. The information contained herein is based on sources believed to be reliable; however, Calder Capital makes no representations or warranties, express or implied, as to the accuracy, completeness, or timeliness of the content. Market conditions are subject to change without notice, and past performance is not indicative of future results. Readers are advised to consult with their professional advisors before making any business or investment decisions. Calder Capital expressly disclaims any and all liability that may be based on the information contained in this report.