Reference Article: Axial Pursuits Report: 1H 2026
I read a lot of market reports. Most of them are written for Wall Street. The Axial Pursuits Report is worth your attention if you own a business in the $1M–$10M EBITDA range — because what Axial just released in their 1H 2026 data confirm several things I've been telling clients for the better part of the last year:
The market is open. Buyers are active. But this is not 2021, and if you walk into a sale process with 2021 expectations in 2026, you are going to be disappointed.
Here's what the data actually tells us:
The Buyer Pool Is the Largest It Has Ever Been
In 2025, Axial recorded an all-time high of 2,635 new buyers joining the platform — a 36% year-over-year increase. That's not a small number. That is a structural shift in who is chasing lower middle market businesses, and it has meaningful implications for sellers.
The traditional dominance of private equity (PE) funds and independent sponsors has given way to a far more diverse buyer landscape. In 2021, PE and independent sponsors together represented 61% of all closed deals on the platform. By 2025, that combined share had fallen to 45%. The gap has been filled by search funds, holding companies, family offices, and individual investors — all of whom now represent a meaningfully larger share of completed transactions than they did five years ago.
Why does this matter to a seller? Because more buyers mean more competition for your business — if it's the right business. And it means the profile of who ultimately buys your business may look quite different from what you imagined. I've seen family offices and holding companies write checks that surprised even sophisticated sellers. Don't assume PE is the only credible buyer in the room.
The Sweet Spot Remains the $1M–$3M EBITDA Band (This my Sweet Spot as well)
Across every buyer type on the platform — private equity, independent sponsors, family offices, holding companies, corporations, search funds, and individual investors — buyer demand concentrates most heavily in the $1M–$3M EBITDA range, with each category showing approximately 93–95% of active mandates targeting businesses in that band.
If your business generates somewhere between $1M and $3M in annual EBITDA, you are sitting in the most competitive, most sought-after segment of the lower middle market. That is not a coincidence — it is a structural reality driven by deal size, financing availability, and the sheer volume of buyers who can execute in that range. This is good news for sellers in that tier, provided they go to market correctly.
There Are Sectors Where Buyers Are Hungry and Supply Is Tight
Industrials lead both deal volume and buyer interest, ranking first in both categories — a reflection of the durability and recurring demand of many industrial businesses. Business services rank second in buyer interest but only sixth in deal volume, meaning there is significantly more buyer demand than available supply in that sector.
I see this play out in real transactions. When you have more buyers chasing fewer deals, competitive dynamics work in the seller's favor — assuming the business is well-prepared and properly positioned. If you own a business services company with strong recurring revenue and clean financials, right now is an environment where a well-run process can generate real competition.
Food & hospitality is the flip side of that coin. It ranks second in deal volume but seventh in buyer interest — a supply-demand imbalance that should give sellers in that sector pause. More sellers, fewer committed buyers. That changes the leverage equation meaningfully.
The Market Is Stabilizing — But Sellers Need to Be Realistic
The leading reason deals failed to close in 2025 was valuation expectations, cited by 28.3% of respondents — narrowly ahead of diligence findings at 24.5%. Read that again. More deals fell apart over price disagreements than over anything found in due diligence. That tells you exactly where the friction in this market lives.
On the investor side, heading into 2026, half of buyers expect the deal-closing environment to remain about the same as in 2025, and 32.1% actually expect it to get easier. That is a notable shift from mid-2025, when 56.2% of investors said getting deals done had become harder.
The tailwinds are building. But the discipline hasn't disappeared. Buyers who were "very willing" to stretch on valuation for a high-quality asset dropped from 25% to just 11.1% compared to mid-2025, while the share of buyers who are "somewhat reluctant" on valuation nearly doubled. The message is clear: quality still commands a premium, but buyers are underwriting more carefully than they were a year ago.
Advisors Expect More Sell-Side Activity in 2026
77.9% of M&A advisors surveyed expect to win more client engagements in 2026 than they did in 2025. That is a strong indicator that more business owners are getting serious about exit planning — and that the pipeline of businesses coming to market is expanding.
Seller sentiment is described as "opportunistic but cautious" by 61.5% of advisors, while fewer sellers are pausing their processes compared to mid-2025, and the share of eager sellers has nearly doubled to 19.2%.
Conclusion
Here's my read: sellers who have been sitting on the sidelines waiting for "the right time" are beginning to move. If you've been in that group, the data supports taking a serious look at your options in the next 12 to 18 months. The window is open. The buyer pool is deep. But the sellers who succeed will be the ones who prepare properly, price realistically, and go to market with a team that knows how to run a competitive process.
I've closed over 300 transactions totaling more than $300 million. The businesses that sell at the best prices are almost never the ones that "test the market." They are the ones that do the work ahead of time — clean financials, organized documents, a realistic understanding of value, and a strategy for who the right buyers are.
If you'd like to talk through where your business stands in this market, I'm happy to have that conversation.
Eric J. Gall, MBA, CM&AP, CBI, ABI, M&AMI | Edison Business Advisors | 239.738.6227 | [email protected] | www.edisonba.com
