The U.S. M&A market has been relatively flat through the first five months of 2026. If you strip out the mega deals which doubled M&A transaction values in 2026 compared to the prior year, both transaction volume and value for middle market transactions have been relatively stable. The middle market ($50MM–$250MM Enterprise Value) is in a steady, durable recovery – not explosive, but building. Deal volume in the segment rose 10.7% year-over-year in Q1 2026, with total disclosed middle market transaction value reaching $45 billion, up 26.8% year-over-year. For the remainder of 2026, the pace of activity is expected to accelerate modestly as credit markets improve and a backlog of quality sellers reaches the market.
U.S. M&A – Key Statistics
| Metric | YTD May 2026 | YTD May 2025 | Change |
| U.S. Deal Count (all sizes) | 4,653 | 4,851 | –4.1% |
| Middle Market Volume Growth (Q1) | +10.7% YoY | +6.6% YoY | Accelerating |
| Middle Market Disclosed Value (Q1) | $45 billion | $35.5 billion | +26.8% |
Key Market Drivers
- Regulatory tailwinds: The FTC and DOJ have returned to a more relaxed antitrust approach, abandoning the prior administration’s anti-consolidation posture. The restoration of HSR early termination is accelerating deal timelines.
- Strategic imperative: Corporate buyers are pursuing acquisitions to acquire AI-readiness, automation and capabilities, supply chain resilience, and digital capabilities that are costly or slow to develop organically, expanding the universe of motivated buyers for middle market assets.
- Valuation normalization: Average net leverage in middle market deals fell in 2025, reflecting disciplined underwriting. Valuation gaps between buyers and sellers are narrowing, supporting deal execution.
- Private credit maturity: Even considering the negative media attention, the $1.5+ trillion private credit market dominates middle market deal financing. Direct lenders offer certainty of execution and flexible terms.
- Private equity dry powder: PE firms hold an estimated $1.6 trillion in undeployed capital globally. At the current pace, clearing the existing PE inventory would take nine years. LP pressure to return capital is intensifying, creating simultaneous demand for new platforms and motivated exits.
Central U.S. Region
The central United States – Texas, Oklahoma, Kansas, Missouri, Arkansas, Nebraska, Iowa, Colorado, Louisiana, and adjacent states – is one of the most economically dynamic middle market M&A environments in the country. Texas alone accounts for approximately 9% of U.S. GDP and leads the nation in Fortune 500 headquarters. Dallas-Fort Worth, Houston, Oklahoma City, Tulsa, and Kansas City are primary transaction hubs. The region’s concentration in aerospace & defense, industrial manufacturing, agriculture-related businesses, energy, infrastructure, and healthcare services aligns directly with the sectors experiencing the strongest 2026 M&A tailwinds. A large base of founder- and family-owned businesses in the $50MM–$250MM range approaching ownership transition provides sustained seller supply, while the region’s lower cost structures and favorable tax regimes attract financial and strategic buyers.
H2 2026 Outlook
2026 will deliver the middle market recovery expected in 2025 but disrupted by tariff shocks and geopolitical volatility. The rebound is steady and durable rather than explosive. Quality assets in the $100MM–$250MM range are commanding competitive valuations and terms.
- Anticipated Fed rate cuts in Q3–Q4 2026 would improve buyout economics and CEO confidence.
- Pent-up seller supply: multi-year inventory of business owners who delayed selling is expected to reach the market in H2 2026–2027.
- PE add-on programs remain highly active, providing reliable demand for smaller middle market targets.
- Risks: persistent inflation (CPI 3.8% in April 2026), geopolitical volatility, residual tariff sensitivity, and private credit stress in certain subsectors.
- Volume forecast: middle market deal volume growth of 8%–12% for full-year 2026 vs. 2025.
Central US Sector Snapshot
In the section below, we consider the M&A outlook for several key industries in the Central and Southern United States.
| Sector | H1 Activity | Key Drivers | H2 Outlook |
| Aerospace | High / Active | Defense budgets, MRO consolidation, reshoring | ▲ Positive |
| Chemicals | Moderate | Portfolio rationalization, agrochem | ► Stable |
| Construction | Moderate | Infrastructure spending, data center build-out | ▲ Positive |
| Infrastructure | High | Energy transition, digital infra, federal programs | ▲▲ Strongly Positive |
| Energy – Oil & Gas | High / Paused Q2 | Basin consolidation, gas/LNG demand, midstream | ▲ Rate-Dependent |
| Engineering | Active / Building | Infrastructure programs, E&T expertise | ▲ Positive |
| Healthcare | High / Accelerating | ASCs, physician practices, behavioral health | ▲▲ Strongly Positive |
| Industrial Mfg. | Selective | Reshoring, electrification, defense alignment | ► Stable / Improving |
| Transportation & Logistics | Moderate | Rail consolidation, specialty logistics, tech | ▲ Positive |
| Telecommunications | Infra Active | Rural broadband, 5G, data center connectivity | ▲ Positive |
Aerospace is among the most active M&A sectors in 2026. Deal value surged from $25 billion in 2024 to $42 billion in 2025, and activity is building further. Rising global defense budgets, geopolitical tensions, and supply chain reshoring are driving acquisitions across MRO, propulsion systems, avionics, unmanned systems, and space. Mid-tier companies are advancing end-to-end integration strategies spanning component manufacturing through lifecycle support.
Central U.S.: Texas (F-35 production, Bell Textron), Oklahoma (Tinker Air Force Base logistics), and Kansas (Wichita general aviation) host a significant concentration of aerospace contractors, MRO facilities, and defense technology firms in the middle market. Vertically integrated supply chain buyers are most active.
Chemicals M&A in 2026 reflects a structural portfolio reset. Large players including LyondellBasell and Dow are divesting non-core specialty businesses, generating carve-out opportunities in the middle market. Specialty chemicals in high-performance coatings, adhesives, agricultural chemicals, and water treatment are attracting PE and strategic buyers. Supply chain regionalization driven by tariffs is benefiting domestic producers.
Central U.S.: The Gulf Coast (Texas/Louisiana) petrochemical complex and agricultural chemicals markets across Kansas, Oklahoma, and Nebraska generate meaningful middle market deal flow, often with fragmented, owner-operated business structures suited to consolidation.
Construction M&A is supported by durable demand from federal infrastructure programs (IIJA), AI-driven data center construction, and near-shoring industrial build-out. Specialty contractors – particularly HVAC, electrical, fire protection, and environmental remediation – are the primary PE targets due to recurring service revenues and fragmented markets. Building materials businesses also remain active targets.
Central U.S.: Texas is one of the nation’s most active construction markets. Specialty contractors across the region are frequent targets for PE buy-and-build platforms and national strategic acquirers pursuing geographic expansion. Skilled labor availability and lower cost structures are regional advantages.
Infrastructure M&A rebounded strongly, with H1 2025 transaction value of $136.6 billion already exceeding all of 2024. PwC’s Global Infrastructure Outlook projects $150 trillion in cumulative infrastructure spending over 25 years. AI data center proliferation, grid modernization, LNG export infrastructure, broadband expansion, and water system investment are all generating deal flow. Long-duration contracted revenues and inflation linkage make infrastructure assets attractive to institutional capital.
Central U.S.: The Mid-Continent energy corridor, Texas power grid investment, rural broadband programs, and major transportation projects position the central U.S. as a primary beneficiary of national infrastructure spending. Pipeline and processing infrastructure M&A is particularly active.
U.S. upstream M&A hit a quarterly two-year high in Q1 2026 before cooling in Q2 amid Iran conflict-related oil price volatility. Core Permian acreage is largely consolidated; buyers are pivoting to the Anadarko Basin, Mid-Continent, and Uinta Basin. Natural gas and LNG assets are gaining strategic priority driven by AI data center power demand and U.S. LNG export growth (~18% projected for 2026). Midstream saw 35 deals in 2025, with further consolidation expected as new pipeline capacity comes online.
Central U.S.: The Permian, Anadarko, and Mid-Continent basins are globally significant deal-making environments. Flywheel Energy’s $3 billion acquisition of Ovintiv’s Anadarko Basin assets illustrates the region’s ongoing consolidation. Midstream transactions connecting basins to Gulf Coast LNG export terminals remain highly active.
Engineering services – spanning Architecture & Engineering, environmental consulting, civil/structural, and program management – recorded positive M&A momentum through 2025 and into 2026. Demand is anchored in federal infrastructure programs, energy transition projects, and data center engineering. WSP Global’s proposed $3.3 billion acquisition of TRC highlights appetite for scaled engineering platforms. Markets are highly fragmented, providing compelling buy-and-build opportunities for PE consolidators.
Central U.S.: Oklahoma and surrounding states host a large inventory of independent engineering firms serving oil and gas, transportation, water, and environmental sectors. Many are founder-led and approaching ownership transition, making the region particularly active for PE roll-up strategies.
Healthcare is one of the most active middle market M&A sectors in 2026. North America saw a 30% increase in deal value in 2025, and middle market volume is projected to grow 10–15% year-over-year in 2026. Ambulatory surgery centers (ASCs) – with EBITDA margins of 20–30% and volume growth of 6–8% annually – are among the most sought-after assets. Behavioral health, physician specialty practices (cardiology, ophthalmology, oncology), home health, and specialty pharmacy are all highly active. PE-backed platforms represent over 40% of physician practice acquisitions.
Central U.S.: The region offers substantial greenfield opportunity given lower historical PE penetration relative to coastal markets, a large and growing aging population, and significant physician practice fragmentation across Texas, Oklahoma, Kansas, and Missouri.
Industrial manufacturing M&A is selective but building. The sector posted the strongest aggregate deal value growth of any sector in 2025 (+91% YoY). Buyers are prioritizing assets aligned with electrification, thermal management, defense supply chains, and AI-driven industrial infrastructure. Portfolio rationalization divestitures by large public industrial companies are generating middle market carve-out opportunities.
Central U.S.: The region hosts a large base of family-owned industrial manufacturers – precision machined components, oilfield equipment, agricultural equipment, food processing, and specialty metals – many approaching ownership transition. The competitive manufacturing cost structure and proximity to natural resource supply chains attract acquirers seeking domestic production capacity.
Transportation & Logistics M&A gained traction in H2 2025, with buyers favoring strategic alignment over volume. The pending Union Pacific–Norfolk Southern merger is the sector’s defining 2026 event, creating adjacent opportunity in track maintenance, railcar services, transloading, and intermodal logistics. Specialized logistics subsectors – healthcare/pharma, temperature-controlled, and dedicated transport – command premium valuations due to structural growth and mission-critical supply chain positioning.
Central U.S.: Dallas-Fort Worth is one of the nation’s most important intermodal freight centers. Kansas City is a major rail hub. Near-shoring of manufacturing to the central U.S. and Mexico is creating new freight flows and demand for specialized logistics capacity across the region.
Telecom M&A in 2026 is bifurcated between highly active infrastructure transactions and more measured traditional service company consolidation. Federal BEAD program funding for rural broadband, data center connectivity demand driven by AI infrastructure build-out, and 5G network expansion are the primary deal catalysts. Tower and cell site consolidation continues as infrastructure REITs and PE-backed aggregators pursue geographic scale. Traditional telecom services M&A is more selective as AI disruption uncertainty defers strategic decisions.
Central U.S.: Texas, Oklahoma, Kansas, Nebraska, Iowa, and Missouri collectively have large rural underserved populations making them primary BEAD program beneficiaries. Regional ISPs and CLEC businesses are natural consolidation targets as national broadband platforms expand. Data center development in Oklahoma and Texas is driving network infrastructure M&A.
How Can ClearRidge Help You Sell Your Business?
In order to capitalize on current valuations and close a business sale in 2026, work needs to start early, with diligent planning and preparation to maximize sale price and terms. Our team at ClearRidge stands ready to clear all pre-emptive due diligence, research, identify and screen prospective buyers, create all confidential marketing materials, data analysis and memoranda, confidentially market the business, lead negotiations on price and terms, and manage the opposing counterparty’s diligence teams. Clients trust ClearRidge to deliver a confidential and discrete preparation and sale process. We remove obstacles to close a transaction and ensure only the most qualified buyers with the capital commitment make it to the closing table.
This report is prepared for informational and general market orientation purposes only. It does not constitute investment advice, financial advice, or a recommendation to pursue any particular transaction or investment strategy. Market conditions are subject to rapid change, and actual outcomes may differ materially from projections herein. Recipients should consult qualified financial, legal, and tax advisors before making any investment or transaction decision. Data sourced from PwC, EY, Deloitte, Bain & Company, McKinsey & Company, BCG, Capstone Partners, KPMG, Enverus, and other recognized M&A research providers.
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