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disparities diminish, selectivity remains key: Firms are gravitating toward targets with reliable cashflows, scalable operations and clear synergy potential, which could drive a surge in volume if these patterns hold. Additionally, the rise of alternative financing options, such as private credit and structured equity, provides flexible tools to navigate complex transactions and further fuel momentum.Sectoral trends will play a crucial role in defining the 2026 M&A narrative, with several industries exhibiting strong resilience and upside. The TMT space continues to thrive, driven by advancements in artificial intelligence and the escalating need for data infrastructure. In 2025, overall TMT deal values increased 77% year over year to about $1.1 trillion, while middle market transactions in the sector grew 12% year over year to $127 billion, highlighting the sector%u2019s strong appeal for transformative acquisitions. Healthcare remains a consistent performer, where established players are actively seeking to bolster their portfolios through acquisitions focused on innovation, such as therapeutics for chronic conditions. This resilient sector benefits from demographic shifts and technological integrations, making it compelling for investments aimed at longterm value creation. Other areas, including industrial services, are also gaining traction as firms capitalize on supply chain optimizations and digital transformations. Across these sectors, middle market companies are increasingly viewed as attractive for their agility and niche expertise, allowing sponsors to consolidate fragmented markets and achieve economies of scale.Beyond these core drivers, emerging themes are influencing the middle market playbook. For instance, supply chain resilience is becoming integral to deal evaluations, with buyers prioritizing targets that exhibit diversified networks and agile logistics capabilities. This focus mitigates disruptions and enhances operational efficiency in an investor landscape increasingly focused on long-term stability. Digital enablement is another accelerator, as middle market firms adopt AI and automation to enhance operations, creating opportunities for tech-savvy PE acquirers to drive post-deal efficiencies. However, challenges remain in the 2026 landscape. Ongoing economic uncertainties, evolving regulatory environments and the necessity for precise post-merger integration amid intense competition may temper the speed of the rebound. Buyers continue to adopt a selective stance, gravitating toward leading companies with strong financials and operational resilience rather than those facing significant hurdles. Nevertheless, the prevailing outlook points to a steady market recovery, with projections for rising deal volumes as financing conditions improve and overall confidence strengthens. At Texas Capital, we are optimistic about the unfolding opportunities in 2026 and remain committed to assisting private equity firms in this vibrant market. Our suite of advisory expertise, customized financing options and strategic guidance is designed to support your endeavors seamlessly. We look forward to exploring these developments at ACG%u2019s Texas Capital Connection and partnering with you to capitalize on the momentum ahead.Navigating the Middle Market M&A Landscape in 2026: Opportunities Amid Rebound%u2013 continuedSources: Mergermarket, S&P Capital IQ, PwC Intelligence, TMT Finance