If your business owner clients have been waiting for the M&A market to fully reopen, their patience may be running out of runway. 2026 isn’t a slow market—it’s a choppy one. And choppy markets are often more consequential than calm ones. They reward preparation and punish hesitation.
For CPAs advising clients on exit readiness, that distinction matters. Here are five signals worth watching this year.
1. Capital is abundant—but deal flow is still selective
The market isn’t short on buyers. Private equity firms are sitting on significant dry powder and actively looking for quality assets. The problem is a persistent mismatch: abundant capital chasing limited quality deal flow. That keeps valuation expectations elevated on the sell side while pushing buyers to be more deliberate about the targets they pursue.
For your clients, the practical takeaway is this: preparation and presentation have never mattered more. Sellers who aren’t transaction-ready aren’t getting second looks. This isn’t the kind of market where a deal closes itself.
2. Pre-LOI diligence is becoming the new normal
One of the more meaningful shifts in 2026 is a change in when buyers want answers. Traditionally, a signed letter of intent marked the starting point for due diligence. That’s increasingly no longer the case.
More frequently now, buyers are approaching sellers and asking for some form of financial validation before they put an offer on paper. What’s emerging is essentially a “quality of earnings lite”— a focused pre-LOI review designed to give a buyer enough confidence to write a real offer without committing to a full diligence process upfront.
Here’s the downstream implication for advisors: this process almost always becomes a two-parter. Once pre-LOI diligence confirms the deal is real and an offer is accepted, the buyer’s lender typically requires a full QoE report before financing is approved. The scope of advisory work effectively doubles. If your clients are approaching a transaction, they should understand how this sequenced process works—and so should you.
3. Corporate carve-outs are on the rise
Not every seller wants to sell everything. More business owners are coming to market not with a company, but with a piece of one—a non-core brand, a division, a business unit that no longer fits the strategy going forward.
That’s often a sound decision. But it creates accounting challenges many sellers underestimate. To bring a carved-out unit to market, the seller has to be able to present it as a standalone entity: separated costs, allocated revenues and expenses, clean historical financials that allow a buyer to underwrite the acquisition with confidence.
If your clients are exploring partial exits, don’t underestimate the complexity—or the lead time—involved in getting there. The earlier you can start that conversation, the better positioned they’ll be.
4. The baby boomer wave is still rolling
Across the middle market, there are business owners who have been talking about selling for five, 10, sometimes 15 years—with no succession plan, no buyer lined up, and no transaction on the horizon. Many of them are now in their late 70s or early 80s.
This is a planning story as much as a demographic one. Businesses that reach the market without adequate preparation—unclear financial records, outdated ownership structures, unresolved customer concentration risks—struggle to attract buyers or achieve fair value. The work keeps getting deferred because the exit always feels like something that can wait.
Your opportunity as an advisor is to get ahead of that conversation before the window starts closing. Ask the question now. A few years of steady preparation is worth far more than a compressed push when the seller is finally ready to move.
5. Deal readiness matters more than market timing
This is the most important signal on the list—and the hardest one for clients to internalize.
Middle-market sellers have a remarkable capacity for finding reasons not to sell. Interest rates are too high. Tariffs are creating uncertainty. The economy feels wobbly. There’s always something—and in fairness, some of those concerns are legitimate. But for many owners, macro uncertainty functions less as a genuine obstacle and more as a permission slip to delay a decision they’re not emotionally ready to make.
The problem with that logic is that you can’t time M&A markets the way you’d time a stock trade. When conditions shift—and they can shift quickly—buyers who are ready will capture the premium, and sellers who were still getting ready will miss it.
What does readiness actually look like? Clean financials, ideally audited or reviewed, going back two to three years. A defensible adjusted EBITDA. A clear picture of customer concentration, contract terms, and key-person dependencies. Corporate structure and ownership documentation that’s current. If a carve-out is part of the plan, that process needs to start well before the seller needs it.
None of that requires your client to commit to a transaction. It simply means they’ll be able to move when the moment is right—rather than scrambling when it arrives.
What CPAs can do now
The professionals best positioned to help clients navigate this market aren’t waiting for a transaction to start the conversation. They’re already having it — through readiness assessments, carve-out planning discussions, and honest conversations about what quality-of-earnings scrutiny actually involves.
The choppiness of this market is an opening, not an obstacle. Use it to build a stronger advisory foundation with the clients who need it most. When the floodgates do open, the ones who are ready will be glad you asked.
ABOUT THE AUTHOR:
Craig Hamm is a partner in the Transaction Advisory Services practice of top 50 accounting, tax, and advisory firm BPM, advising buyers and sellers across quality of earnings, financial due diligence, and corporate carve-out engagements.
Photo credit: pressfoto/Freepik
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Tags: Accounting, Advisory, clients, CPAs, Mergers and Acquisitions
