Private Equity Firms Expected to Unleash Middle-Market M&A Deals, Survey Says

M&A activity is expected to rise among midsize companies as private equity firms become more willing to do deals, according to a Citizens Financial survey of about 400 companies.

Executives at middle market companies and private equity firms are optimistic about mergers and acquisitions with 58% expecting volume of M&A to climb in 2026. Transactions among large corporations accounted for most of the activity in 2025.

“After the recent megadeals, we expect optimism with economic growth, interest rates and valuations to broaden the wave of M&A activity,” said Jason Wallace, Citizens’ head of M&A, in a phone interview with Reuters.

The majority of executives surveyed in November expect valuations to rise mainly in technology, media and telecommunications, as well as financial services and real estate, lodging and leisure.

Activity has been rising among financial firms, Wallace added, with a large number of deals related to wealth management.

Private equity executives are more engaged, with 86% feeling confident in M&A decision making in the fourth quarter, up from 48% in the first quarter.

Strong economic growth, interest rate cuts and attractive valuations across sectors are the main reasons for the expected increase in M&A activity, according to the survey. More than half of the private equity firms expect to initiate deals in the second quarter, before the U.S. midterm elections and the potential increase in uncertainty.

About 39% of the private equity firms interviewed expect interest in artificial intelligence companies or assets to drive M&A, the survey showed.