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As we navigate the early months of 2026, the middle market M&A landscape is demonstrating clear signs of resurgence, building on the momentum established throughout 2025. At Texas Capital, we have observed a notable shift from the previous year%u2019s uneven deal flow, where megadeals often overshadowed middle market activity, to a more balanced ecosystem. This change is propelled by accumulated demand, improving economic stability and increased private equity engagement, all set to boost transaction volumes for companies with revenues between $50 million and $1 billion. For private equity firms gathering at ACG%u2019s Texas Capital Connection, this evolving environment offers strategic avenues to deploy capital and foster value in a market primed for growth.Looking back on 2025, global M&A activity experienced a robust recovery, with deal values increasing by nearly 40% to surpass $4.3 trillion. This surge was primarily driven by megadeals in dynamic sectors like technology and healthcare, which captured significant attention and capital. In contrast, the middle market grappled with ongoing obstacles, such as economic fluctuations, persistent gaps in buyer-seller valuations and a more conservative financing climate. Despite these hurdles, optimism has climbed sharply: Recent surveys indicate that confidence levels among corporate leaders and PE executives have hit a six-year high, with 58% describing the M&A climate as favorable, rising to 69% specifically within PE circles. This positive sentiment is supported by multiple factors that position 2026 for a more widespread upturn.Key among these are favorable macroeconomic developments. The Federal Reserve%u2019s ongoing rate reductions have helped stabilize interest rates, making leveraged buyouts more viable and reducing the strain on refinancing for mid-sized businesses. Anticipated rate cuts, coupled with improving cashflows and attractive valuations amid a resilient U.S. economy, position the market for a meaningful pickup in deal activity. These conditions are particularly advantageous for middle market players, enabling them to pursue growth strategies that were previously deferred due to higher borrowing costs and market uncertainty.Private equity stands out as a pivotal force in shaping this rebound. Holding unprecedented amounts of uncommitted capital and managing aging investment portfolios, sponsors are under increasing pressure to execute platform builds, bolt-on acquisitions and well-timed divestitures. After a prolonged period of reduced activity, PE involvement in middle market platform investments increased steadily on a quarter-overquarter basis throughout 2025. Heading into 2026, this trend is expected to intensify, with 39% of middle market executives identifying M&A as a core growth lever, complemented by initiatives like geographic expansions and collaborative partnerships. For attendees at ACG%u2019s Texas Capital Connection, this environment favors succession planning and targeted growth deals. As lending markets thaw and valuation Navigating the Middle Market M&A Landscape in 2026: Opportunities Amid ReboundBradley NapperM&A Investment BankerTexas Capital