Studies

Citizens Bank’s 2026 M&A Outlook argues the U.S. deal market is moving into 2026 on better footing than it has had in several years, with improving sentiment, easing financing pressure, and valuations that feel more workable for both buyers and sellers. The report is based on a survey of 400 U.S. corporate and private equity dealmakers evaluating targets with $50 million to $1 billion in revenue, a slice of the market where activity has been uneven as interest rates and operating forecasts stayed volatile.

Sentiment has improved, with private equity more optimistic than strategics
Citizens’ survey found that 58% of respondents described the current M&A market as somewhat or extremely strong, the highest reading in six years. Private equity respondents were notably more upbeat, with 69% of PE firms rating the market as strong.

Citizens views the second-half pickup in 2025 as an early sign of what could broaden in 2026. “We saw megadeals surge in 2025 as the operational environment stabilized, and we look at those transactions as leading indicators for the rest of the M&A market,” said Jason Wallace, Head of M&A at Citizens. “The outlook for good deal conditions suggests more activity to come for broader segments in 2026.”

For the middle market, that matters. The last two years have not been short on interest, but the combination of financing costs and bid-ask spread has kept a lot of would-be deals from clearing.

Rate cuts and growth expectations are doing heavy lifting
The report suggests 2026 planning is increasingly being shaped by expectations of a more stable operating backdrop. Companies cited U.S. growth rates (54%) and anticipated rate cuts (53%) as the top two factors expected to make operations easier in 2026, followed by global and central bank monetary policy (46%).

“The business environment is critical for M&A as buyers and sellers need to have greater certainty regarding performance and forecasts,” said David Dunstan, Head of Industrials, M&A Advisory at Citizens. “Economic growth, favorable interest rates and less volatile global trade dynamics set companies up for continued stability in the operational landscape.”

The message is not that uncertainty disappears; it is that visibility improves enough for buyers to underwrite forward performance without building extreme downside into every model.

Policy friction remains a real constraint
Even as sentiment improves, respondents pointed to ongoing operational pressure from policy and regulation. Tariffs and trade policy were cited by 42% of companies as making operations harder in 2025, followed by changes in tax policy (38%) and changes in immigration policy (33%).

At the same time, the report highlights areas where management teams saw real tailwinds. Interest rate cuts (59%) and increasing adoption of AI (56%) were among the most frequently cited factors that made operations easier in 2025, suggesting technology investment is being treated as a practical lever for productivity and cost control—not just a talking point.

Valuations are stabilizing, and sellers are showing up
Citizens Bank points to improving valuation conditions as a central reason the 2026 pipeline could be deeper than in recent years. In the survey, 39% of companies expected valuations to rise in 2026, while 49% of private equity firms expected the same.

“We hear a growing call for liquidity among private equity investors, and 2026 could deliver the right conditions to bring that backlog to market,” said Mark Lehmann, vice chair of Citizens’ Commercial Bank, citing valuation improvement across most sectors.

Citizens also found that the seller bench is building. Seventy-nine percent of companies indicated they could be potential sellers in 2026, with valuation opportunity cited as the top motivation, alongside pressures including tariffs and input costs.

Implications for private equity: exits matter again
For sponsors, the report’s findings reinforce a familiar setup heading into 2026: plenty of add-on appetite, but a growing need to reopen the exit window. If rate expectations hold and valuations remain firm, the year could bring a more functional market where sponsor-to-sponsor deals, corporate buyouts, and other liquidity events feel less episodic and more like regular throughput again.

Citizens Bank’s Corporate Finance platform provides capital markets and advisory services to middle-market companies and financial sponsors, with capabilities spanning M&A advisory, debt and equity capital markets, valuation advisory, and sponsor finance. The group supports acquisition financings, leveraged buyouts, recapitalizations, refinancings, and growth initiatives, and its Sponsor Finance team focuses on private equity firms with debt needs ranging from roughly $40 million to $500+ million. Citizens Bank is headquartered in Providence, Rhode Island.

To download a copy of Citizens Bank’s 2026 M&A Outlook click HERE.

A new national survey from Deloitte shows that 86% of corporate and private equity firms have adopted generative artificial intelligence in their M&A workflows, with most respondents expecting to increase related investment over the next 12 months. The new survey, Deloitte’s first-ever 2025 GenAI in M&A Survey, gathered responses from 1,000 senior investors across major U.S. industries.

Among respondents, 83% have invested $1 million or more into generative AI for M&A use cases, with 88% of private equity firms and 77% of corporate entities exceeding that threshold. Spending is expected to continue rising — 54% of private equity respondents and 58% of corporate respondents anticipate modest increases, while 24% and 28%, respectively, foresee significant investment expansion.

The report also shows that early use of generative AI is mainly focused on the early stages of deals—such as M&A strategy (40%), identifying and evaluating targets (35%), and performing due diligence (35%). Most leaders are focused on seeing clear business results, with 81% of private equity firms and 80% of corporate participants expecting a measurable return on investment within one to three years.

“The 2025 Survey confirms that dealmakers are confident in GenAI’s potential to recast the look and feel of dealmaking, and are investing accordingly to realize its transformational benefits,” said Erik Dilger, managing director, Deloitte Financial Advisory Services. “While it’s still early innings for the technology and M&A application is currently concentrated on pre-sign activities, organizations are looking ahead to its potential to help inform decision making, uncover new sources of value, and drive post deal synergies.”

Despite growing momentum, barriers to adoption remain. Among respondents, 67% cited data security as a top concern, followed closely by data quality and availability at 65%. The survey reflects an accelerating focus on operational efficiency and information intelligence across the transaction lifecycle, but also highlights the need for governance, trust, and scalability in AI deployment.

Professional services and fintech firms are increasingly investing in generative AI (GenAI) to accelerate deal execution, reduce operational costs, and improve accuracy across transaction workflows. These organizations are applying GenAI to automate data synthesis, enhance due diligence, streamline valuation analysis, and support decision-making throughout the M&A lifecycle. By integrating GenAI into their digital ecosystems, deal teams are moving beyond experimentation toward measurable productivity and insight gains.

According to Gartner, worldwide end-user spending on generative AI is forecast to reach $644 billion by 2025, reflecting rapid adoption across industries including finance, law, and business intelligence. Other industry analyses, such as the Meridian Capital AI Market Monitor (Spring 2024), highlight sustained annual growth of more than 20% across the broader AI market. Together, these forecasts underscore how GenAI is shifting from a promising innovation to a strategic imperative within professional and financial services.

The widespread integration of generative AI into corporate and private equity dealmaking underscores broader shifts in the professional services and financial technology landscape. Deloitte’s findings suggest that deal teams are moving beyond experimentation and toward embedded, outcomes-focused applications as part of larger digital transformation strategies.

Click HERE to access Deloitte’s 2025 M&A Generative AI Study.

© 2025 Private Equity Professional | October 15, 2025

Artificial Intelligence (AI) has emerged as a key strategic focus across industries, regardless of their size or domain. Amid a challenging dealmaking environment marked by uncertainty and volatility, AI has been a rare bright spot, spurring significant M&A activity. According to Dealogic, the number of U.S. M&A transactions is down approximately 18% year-over-year. However, a considerable percentage of the deals that are taking place are fueled by AI. This reflects a critical shift in how companies are leveraging M&A to position themselves at the forefront of the AI revolution.

One prominent example illustrating this trend is Meta’s $14.8 billion investment in Scale AI, which was announced in June 2025. As part of this transaction Meta obtained a 49% stake in Scale AI and positioned Scale AI CEO Alexandr Wang as the head of Meta’s initiative focused on pursuing “superintelligence.” Industry rumors suggest that Meta CEO Mark Zuckerberg pursued this acquisition after facing frustrations with the progress of the company’s internal AI efforts. The investment in Scale AI follows similar attempts by Meta to acquire other leading AI startups like Perplexity AI and Safe Superintelligence. Additionally, recent reports indicate that Apple has considered acquiring or investing in Perplexity AI as part of its broader strategy to advance its AI capabilities.

The Scale AI transaction exemplifies a broader trend in which companies turn to M&A to fast-track their AI ambitions. Building and deploying advanced AI systems requires not only significant time but also highly sought after talent. Establishing these capabilities organically can be a monumental challenge. By acquiring companies with proven expertise in AI, organizations can overcome these hurdles and accelerate the development and deployment of cutting-edge solutions.

AI Talent as a Scarce and Strategic Resource
One of the more pressing reasons for AI-focused acquisitions is the scarcity of talent. Skilled AI professionals represent a critical yet limited resource in today’s market, and accessing this specialized expertise is essential for companies aiming to achieve success in AI initiatives. Through what is often referred to as “acqui-hiring,” companies can acquire not just innovative technologies and Intellectual property but also teams of seasoned experts. These hires can then train and lead existing teams, ensuring a smoother transition and maximizing the value of AI investments.

At the heart of this surge in AI-driven deals is the recognition that AI represents not just an opportunity but an imperative.

A compelling example of this comes from semiconductor giant AMD. Recently, the company announced its acquisition of the team behind Untether AI, a move designed to enhance energy-efficient AI inference chip development. This type of strategic acquisition underscores the value of bringing in deeply knowledgeable teams with the skills needed to stay competitive.

It can be unrealistic within the context of a very rapidly evolving technology for companies to expect existing workforces to inherently possess the skillsets required to harness AI’s full potential. Without the right expertise in place, AI projects may falter, leading to costly missteps. By utilizing M&A as a mechanism to recruit top talent, companies are not only mitigating risks but also significantly improving the likelihood of success.

A High-Stakes AI Race
At the heart of this surge in AI-driven deals is the recognition that AI represents not just an opportunity but an imperative. Companies across industries are in a race to integrate AI into their products, services and operations. Falling behind in certain industries could present existential risks.

Dealogic estimates that 7 of the largest 15 U.S. M&A transactions have been tied to companies positioning themselves for success in AI. Organizations are keenly aware that failing to make bold moves in this space could leave them obsolete. Investing now, through both organic development and strategic acquisitions, is increasingly seen as the only viable path to long-term relevance.

M&A isn’t just about acquiring assets; it’s about securing a spot in the future. For many companies, AI represents that future.

This urgency is evidenced by the dealmaking activity among businesses we work with. Many acknowledge that pursuing an AI M&A strategy is essential to ensure they remain competitive, even amid broader market unpredictability. The adoption of AI technologies through acquisitions allows companies to bring innovative solutions in-house faster, gain a competitive edge, and ultimately safeguard their future.

Looking Ahead
The role of AI in driving M&A activity shows no signs of slowing. Regardless of when broader market predictability returns, AI will remain a defining force in dealmaking for the foreseeable future. Companies that take bold strategic action now, whether through acquiring AI capabilities or heavily investing internally, will position themselves as leaders in an economy increasingly shaped by AI advancements.

M&A isn’t just about acquiring assets; it’s about securing a spot in the future. For many companies, AI represents that future. Those who recognize its potential and act decisively now will position themselves for the future, while the ones who don’t put their future at risk.

By capturing the momentum of AI, today’s M&A activity is not only accelerating innovation but also fundamentally reshaping industries and workforce. Forward-thinking organizations will use AI to cement their market positions and redefine the possibilities of technology in the years to come.

About the Author
Chris Clapp leads CrossCountry’s national Private Equity practice where he is responsible for the overall strategy, practice development, business development, and client delivery to the firm’s private equity accounts. In addition to advising private equity firms, Chris works closely with portfolio companies to help maximize operational performance and assist with strategic transactions, such as IPOs, M&A, carve-outs, and divestitures.

CrossCountry Consulting is a provider of specialized finance, operations, and technology advisory services. As an advisor to Fortune 500 companies, emerging growth market leaders, and private equity sponsors, the firm solves today’s most pressing challenges and creates present and future enterprise value through accounting and risk, technology-enabled transformation, and transaction solutions.

© 2025 Private Equity Professional | July 16, 2025

A global private equity (PE) revival is taking shape as dealmaking gains traction, though sluggish fundraising continues to present challenges, according to Bain & Company’s 16th annual Global PE Report. The report highlights a resurgence in both buyout investments and exits, reversing the sharp declines of the previous two years.

Private equity investment values surged 37% year-on-year to $602 billion in 2024, excluding add-on deals, fueled by pent-up demand from general partners (GPs) eager to deploy aging dry powder and an improving economic environment as central banks reduced interest rates. Exit activity also rebounded, with global exit value climbing 34% to $468 billion and exit counts increasing 22% to 1,470. This shift marked a welcome thaw in a previously stagnant exit market that had constrained liquidity and delayed capital returns to limited partners (LPs). However, the industry still faces macroeconomic uncertainties that could impact sustained momentum in 2025.

“2024 can be considered the year of the partial exhale. Whether the renewed impetus in 2024 can build will depend on how policy unfolds,” said Hugh MacArthur, chairman of Bain’s Global Private Equity Practice. “We think the headwinds that have held back activity since mid-2022 should continue to dissipate. The industry is anxious to make deals, GPs are finding creative ways to boost liquidity, more dollars should flow in from sovereign wealth funds and private wealth and returns remain strong. But deal appetite is still tempered by the uncertainties keeping markets on edge. Investors are looking for clarity to break through the policy clouds on the economy, trade, regulation, and geopolitics.”

Bain’s report underscores that while dealmaking has picked up, the private equity landscape is undergoing significant structural changes that will shape competition for investment opportunities and capital. Rising costs to generate market-beating returns, heightened fee pressure, and fierce competition for deals are among the key challenges. Despite these hurdles, the industry has demonstrated resilience and adaptability, positioning itself for future growth as economic conditions evolve.

“Generating alpha has never been more challenging. Strong performance is getting harder, not easier. An emerging upturn will inevitably present important opportunities for investors. But the winners will be those funds that demonstrate a consistent, differentiated model for value creation – and clear strategies for maintaining growth and performance for the long term,” said Rebecca Burack, head of Bain’s Global Private Equity Practice. “The surest way to land in the winner’s circle is to articulate your ambition clearly and develop a practical strategy for how you plan to compete in the years ahead.”

Take-private transactions dominated the high end of the PE market, rising to $250 billion globally in 2024 and accounting for nearly half of deals over $5 billion in North America. The technology sector remained a primary focus for private equity, comprising 33% of buyout deals by value and 26% by volume, with strong activity also seen at the intersection of technology and healthcare. Financial services deal value surged 92% year-on-year, while industrials saw an 81% increase.

The rebound in exits in 2024 provided further optimism, with a 141% surge in sponsor-to-sponsor transactions totaling $181 billion, driven by a 48% increase in deal size. Strategic sales to corporate buyers remained flat, while initial public offering (IPO) activity continued to lag, making up only 6% of exit value. Despite this progress, the exit environment remains a key impediment to strong returns, with distributions as a proportion of private equity’s net asset value sinking to 11%—the lowest level in a decade, down from an average of 29% between 2014 and 2017.

The fundraising environment remained challenging, declining for the third consecutive year in 2024. Private asset fundraising fell 24% year-on-year and is now down 40% from its all-time peak of $1.8 trillion in 2021. The number of funds closed dropped 28% to 3,000, significantly below pre-pandemic levels. LPs have become increasingly discerning, directing capital toward the largest and most experienced funds with proven track records, while smaller and lower-performing funds struggle to meet targets.

Bain also highlighted the evolving role of artificial intelligence (AI) in private equity, with firms aggressively investing in AI capabilities to drive portfolio performance. “With AI evolving at a breakneck pace, Bain cautions that it is not a panacea, nor is there a ‘one-size-fits-all’ approach. But it concludes that learning by doing is the key to harnessing AI’s potential to drive operational efficiencies and enhanced revenues in PE firms and within their portfolios,” the report states.

As private equity firms navigate a competitive and shifting landscape, Bain’s report concludes that those poised to succeed will need to define clear competitive advantages and long-term strategies. With rising costs, regulatory shifts, and evolving investor expectations, firms must take a proactive approach to differentiate themselves and position for sustained growth in the years ahead.

Click HERE to access Bain & Company’s Global Private Equity Report 2025.

© 2025 Private Equity Professional | March 4, 2025