Atlanta – September 13, 2026 -- Middle-market M&A buyers are tightening acquisition criteria even as deal activity persists, with recurring revenue, cash conversion and AI exposure now central to valuation decisions, according to Bennett Thrasher, an Atlanta-based accounting and advisory firm.
The firm's Transaction Advisory Services practice, which supports deals ranging from $20 million to $250 million in enterprise value, identified five trends driving buyer behavior in the current cycle.
Quality metrics now outweigh headline growth for private equity and strategic buyers
Private equity firms, strategic acquirers and lenders are concentrating interest on businesses with recurring or repeatable revenue, strong customer retention, defensible margins and manageable customer concentration. This is creating demand for less glamorous essential businesses in industrial and technical services, specialty manufacturing, infrastructure and healthcare services.
Buyers dissect EBITDA by customer, product line and geography before underwriting deals
Dealmakers are analyzing profitability across operating dimensions to determine whether growth drivers are sustainable, rather than accepting reported earnings at face value.
Add-on acquisition demand is boosting valuations for smaller, founder-owned companies
Buyers increasingly assess targets on platform fit rather than standalone scale, making smaller businesses attractive for their geographic reach, specialized employees or complementary customer bases.
Cash conversion scrutiny is reshaping how buyers price identical EBITDA figures
Trey Stephens, director of M&A Transaction Advisory Services at Bennett Thrasher, said buyers want to know whether a company's growth can continue, if profits convert to cash, and if the business can stay competitive as conditions shift. Two companies with matching EBITDA can carry very different economic profiles depending on working capital and capital expenditure needs, and poor financial reporting can slow deal speed, alter structure or reduce value.
AI exposure beyond software is opening new M&A opportunities in power and data infrastructure
Buyers are evaluating how AI could enhance margins and productivity or, conversely, make a company's products easier to replicate. The technology is also driving acquisition interest in power, data centers, electrical infrastructure and engineering firms supporting the AI economy.
Bennett Thrasher expects middle-market M&A activity to broaden further while buyers remain selective, favoring companies with reliable financial reporting, strong cash conversion and clarity on AI's competitive impact. Stephens noted sustained activity across the lower middle market as owners seek outside capital for growth or pursue exit and succession strategies through institutional investment.