Q2-26 M&A Activity: Large Deals Drive Volume, LBOs Hit 5-Year Low
Global M&A deal volume totaled $1.3 trillion in the second quarter of 2026, an impressive 35.3% higher than a year earlier, but 18.4% below the first quarter of the year. The total deal count, however, was essentially flat both year-over-year (+3.4%) and quarter-over-quarter (-2.4%). That data disparity highlights that large M&A deals continue to dominate the market - there were 34 M&A transactions above $5 billion that collectively made up about 42% of the total deal volume for the quarter.
Source: PitchBook, Q2 2026 Global M&A Report
In North America, Q2-26 M&A deal trajectory was even more heavily weighted toward megacap deals. Overall M&A deal volume was $787 billion for the quarter, down 24.3% from the first quarter of the year, with deals over $5 billion generating 54.0% of the total deal volume.
Corporate Buyers Outpaced Private Equity & LBO Share Falls Further
The Federal Reserve left interest rates unchanged for the quarter, even as the European Central Bank raised rates for the first time since 2023. Both of those decisions kept the cost of debt financing relatively high, which makes leveraged buyouts (LBOs), the main type of acquisition financing for private equity buyers, more expensive. Global LBO volume fell to $287.3 billion, a 35.7% drop from Q1-26 and the lowest share in 5-years while deals led by corporate buyers held steady near $893 billion.
Global LBO activity as % of total M&A
LBO activity (% of total M&A value)
Source: PitchBook Global as of 6/30/26
The retreat by private equity sponsors this quarter fits a pattern of decline that we have been following since the third quarter of 2024 in both deal volume and the number of deals pursued by financial investors in a higher interest rate environment. That trend contrasts with estimates that global buyout dry powder stands at roughly $1.3 trillion (Source: Bain & Co., Global PE Report, Feb., 2026) and needs to get deployed. Most of this still-uncommitted capital was raised by private equity funds in 2022 and 2023, but it has yet to produce a real rebound of buyout activity for small and midsized companies.
Median valuation multiples stayed steady
Median M&A enterprise value (EV)/EBITDA multiple
Median EV/EBITDA multiple
Source: PitchBook Global as of June 30, 2026
Deal pricing remained steady on a trailing 12-month basis (TTM) despite the swings in deal volume. Globally, the median enterprise value to EBITDA multiple (EV/EBITDA) was 10.2x, a level that has been trending higher over the last four years.
What This Means for Middle Market Sellers
Smaller bolt-on purchases remain the main pathway for private equity buyers to reach middle-market sellers. Solid, well-run businesses in fragmented industries are still in demand from private equity sponsors that need to put committed capital to work.
This is exactly where a well-prepared family-owned business has an advantage. Strategic and private equity buyers are actively looking, and private equity needs to deploy capital and generate exits to satisfy their LPs (limited partners). Business owners who go into a sale process with a solid growth story, clean financials, a defensible five-year financial forecast, and a solid family business succession plan already in place are the ones most likely to end up as the most desirable acquisition candidates.
Since 2015, Keene Advisors has been a trusted partner, helping family-owned businesses, founders, and growth-oriented middle-market companies develop and execute customized M&A and liquidity strategies. Contact us today to discuss how to reach your long-term goals.
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