M&A deal value and volume rebounded in 2025, with reported deal volume up ~8% year-over-year and deal value up ~60% through Q3 2025 compared to the prior year. Goldman Sachs’ CFO recently stated that 2025 is on track to become the second-biggest in history for announced mergers and acquisitions industrywide, which is “very encouraging for aggregate overall levels of activity heading into 2026”.
Corporate confidence increased partly due to lower financing costs and narrowing gaps between sellers’ valuation expectations and buyers’ confidence to pay a higher multiple, boosting momentum in mergers and acquisitions. Strategic acquirers have been increasingly engaged in dealmaking in 2025, growing their share of transaction activity. Private equity remains active, now owning more than 100,000 businesses in the United States.
The actions of the Federal Reserve are among the most-debated topics in finance this year, and lower financing costs have undoubtedly added momentum to dealmaking activity. With the most recent rate cut, we see further momentum building into 2026. At the same time, fiscal policy, tariff policy and geopolitical uncertainty remain risks for the year ahead.
The team at ClearRidge consider the M&A outlook for several key industries in the Central and Southern United States.
Aerospace & Defense
Aerospace & defense M&A saw notable strength in 2025, with certain months posting dramatic increases in deal value versus the prior year.
Deal activity is projected to expand into 2026, driven by digitization, supply-chain rebalancing, autonomous technologies and increased defense spending among national security imperatives. While the longer-term trends are positive in aerospace and defense M&A, quarterly cyclicality remains.
Business Services
Business services M&A remained healthy through Q3 2025. Trailing-12-month transaction count is up 13.5% year-over-year. With the sector, compliance, advisory, and tax services have been prominent targets due to stable recurring revenue profiles. Outsourcing and specialized support services continue to attract consolidation plays from both strategic and sponsor buyers.
Businesses providing residential, commercial and industrial services centered around monitoring, maintenance, repairs and upgrade continue to outperform in M&A interest.
Median valuation multiples for business services remained robust, signaling continued investor confidence in operational resilience and cash flow quality. Consolidation trends in business services will likely persist, especially in high-growth subsectors with recurring revenue and service differentiation
Chemicals
Chemicals sector M&A activity has been mixed in 2025. Broader chemical industry fundamentals in 2025 were challenged by a protracted downcycle with muted production growth forecasts. Commodity chemicals have been struggling with global overcapacity (more ethylene and polyethylene plants are expected to come online in 2026). Specialty chemicals, however, have remained strong, and several companies have announced intentions to shift away from commodity chemicals, through organic growth and strategic acquisitions.
Tariffs caused an initial boost in chemical imports in Q1 then later decline, with companies carrying higher inventories to offset tariff and trade risks.
In chemicals M&A, key themes include consolidation in specialty chemicals, portfolio rationalizations, and technology acquisitions. In the first six months, chemical deals related to oil & gas lagged compared with other sectors, with fewer deals and lower transaction values compared to the prior year. The outlook for 2026 remains uncertain, but specialty chemicals are expected to continue as a bright spot.
Engineering & Construction
M&A has been active in engineering and construction with resourcing supply chains, infrastructure, and vertical integration in 2025. This comes amid sector-wide construction activity facing headwinds due to rising material costs, supply chains, and labor shortages.
In part, these industry challenges have caused larger engineering and construction companies to acquire others to solve internal challenges, target certain sectors and alleviate labor issues.
Healthcare
There has been significant acceleration in healthcare M&A in 2025, over four times higher in the first half of 2025 compared to the year before. The outlook for M&A 2026 is strong as healthcare companies pursue strategic acquisitions to diversify their portfolios, enhance operational efficiency, and strengthen market leadership.
Verticals showing heightened activity include life sciences, behavioral health, home health and hospice, and medical technology (AI-assisted diagnostics, predictive analytics, revenue cycle management and workforce management solutions).
Industrial Manufacturing
Industrial Manufacturing was under pressure in 2025, with the Institute for Supply Management’s purchasing managers’ index below 50 for most of the year (under 50 = contraction in the sector). Higher costs of capital made for a challenging business environment, with leaders reluctant to invest in growth. Labor shortages continued and costs continued to increase. The turnaround started halfway through the year, with expectations of a lower rate environment and an increased demand for capital and investment.
Industrial Manufacturing M&A in 2026 is poised for a strong rebound, driven by abundant capital for investment, reshoring trends, government incentives, and tech integration (AI, automation), with mid-market deals expected to surge as companies seek modernization and strategic growth.
Government policies and supply chain risks are also fueling investment in US manufacturing, creating acquisition targets with domestic production.
Infrastructure and Utilities
Power and utilities have seen growth in deal value and M&A activity, driven by increasing investment in a complex energy landscape. Electrification and accelerating datacenter deployment are drivers of investment, along with mergers of regulated utilities. The current administration’s agenda, reducing incentives for clean energy, expansion of fossil fuels and easing of regulations are all impacting strategic decision-making.
Rising spending on data centers and telecom infrastructure (driven by AI computing demands) is catalyzing both strategic acquisitions and private equity interest. Companies are pursuing infrastructure M&A to secure critical supply-chain assets and to future-proof operations.
Oil & Gas
Energy M&A through mid-2025 remained significant, down modestly YoY but markedly above recent mid-cycle levels, fueled in part by continuing consolidation in natural gas assets and midstream infrastructure.
The oil and gas sector will be impacted by geopolitical decisions, policy shifts, tariff and supply chain issues, as well as rapid technological change. A supportive legislature and administration have many in the industry more optimistic in 2026, yet persistent low oil prices and supply chain pressures are limiting the capital available for growth.
The outlook in 2026 calls for continued strategic deals as firms refocus on core asset portfolios, basin consolidation, and infrastructure expansion.
Transportation & Logistics
Transportation and logistics M&A surged in 2025, with logistics consolidation and automation playing central roles. 2026 is poised for increased M&A activity, driven by nearshoring trends, tech integration and lower interest rates.
Increasing investment in distribution, delivery and supply chains has also led to increased M&A activity and investment. Deals have focused on logistics network roll-ups, digital freight platforms, and cross-border supply chain acquisitions.
2026 M&A Outlook
Forecasts call for growth in overall US M&A deal volume in 2026, although some sectors will significantly overperform while others struggle. A reducing rate environment certainly helps M&A activity as the cost to finance an M&A transaction decreases, helping to narrow the valuation gap.
Expected risks in 2026 will be macroeconomic uncertainty, policy and tariff shifts, and interest rate volatility. Catalysts for deal activity include AI-driven transformation, industry consolidation trends, divestiture and spin-off strategies.
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 in the New Year, with diligent planning and preparation to maximize sale price and terms. Our team at ClearRidge stands ready to clear all preemptive 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.
Sources: This report has been compiled from reports and research including Goldman Sachs, EY, KPMG, Deloitte, Solomon Partners, Reuters, S&P Global, and Williams & Wall.
Thinking of Selling Your Business or Planning a Strategic Acquisition? At ClearRidge, we specialize in advising business owners on mergers, acquisitions, and exit strategies. Contact us for a confidential consultation to explore your options and maximize your company’s value. Schedule a Consultation Today
