The Window is Open: Why 2026 Is a "Golden Year" for Manufacturing/Industrial M&A
- Todd
- Dec 10, 2025
- 4 min read
For the past 24 months, many manufacturing and industrial services business owners have sat on the sidelines, waiting for the dust to settle on interest rates and inflation.
The wait is over.
Data from late 2024 and 1H 2025 from major M&A monitors like Pitchbook and PwC confirm a decisive shift. We are no longer in a "recovery" phase; we have entered an acceleration phase. With deal volumes surging 15-20% year-over-year and valuations for high-quality industrial assets rebounding to 8.4x–12x EBITDA, the market has tipped firmly in favor of the seller.
The specific data driving this momentum and why the convergence of strategic urgency and private equity "dry powder" has created a unique exit window heading into 2026.
1. The Volume Surge: A 20% Uplift
The industrial sector is currently outperforming the broader M&A market. While other sectors struggled with volatility in 2023-2024, US manufacturing deal activity surged to over 22.4% in Q3 2025 vs Q3 2024 and an increase 18.6% in Q3 over Q2 2025.
Why the sudden uplift?
Pent-up Demand: Buyers who paused in 2023 are now rushing to deploy capital before competition intensifies further.
The "Flight to Quality": In uncertain economic times, investors flock to tangible assets. Industrial services—specifically those with recurring revenue models are seeing record interest.
For businesses in the $25M–$300M revenue range, this is the "Goldilocks" zone. You are too large for the smaller buyers who are struggling with financing, but you are the perfect "platform" or “add-on” size for private equity firms looking to build regional powerhouses, or "bolt-on" targets for Strategic Buyers seeking immediate scale.
2. Valuations: The Multiples Are Back
Perhaps the most critical question for any owner is: “Am I leaving money on the table?”
According to recent data from Pitchbook and PwC, valuations have not only stabilized—they are climbing.
Strategic Buyers: The mean EV/EBITDA multiple for strategic deals in the industrial sector ticked up to 8.4x (YTD), with premium assets commanding 10x–12x.
Private Equity: We are seeing a sharp rise in EV/Revenue multiples from PE buyers, moving from 1.3x in 2024 to 1.6x YTD. This indicates that financial buyers are willing to pay a premium for top-line growth, confident they can optimize margins post-close.
The "Reshoring Premium" There is a specific premium currently being paid for domestic manufacturing capacity. With 22% of manufacturers shifting operations back to the US and a massive federal push (CHIPS, IIJA, IRA, etc) injecting capital into the sector.
3. The Buyer Landscape: A Tale of Two Aggressors
Who is writing the checks? The data reveals a dual-threat environment that drives competitive bidding processes.
The Strategic Buyer – Corporates are sitting on healthy balance sheets and are under pressure to grow. Organic growth is slow; acquisition is fast. Strategic buyers are currently aggressive in the "Lower Middle Market" ($25M–$500M) because they need to secure supply chains. They aren't just buying revenue; they are buying certainty in their supply chain and labor force. If you have a skilled workforce and specialized machinery, you are a strategic asset, not just a P&L.
The Private Equity Buyer – Private Equity firms are currently sitting on record levels of "dry powder" (unspent capital) that must be deployed. Following a quiet 2023, PE activity has roared back, representing over 40% of deal value in recent quarters.
4. The 2026 Horizon: Why Timing Matters
If the market is good now, will it be better in 2026?
While the outlook for 2026 remains positive, "waiting" introduces asymmetric risk.
Tax & Policy Uncertainty: As we look toward the mid-point of the decade, tax policy debates will reignite. Locking in Capital Gains treatment under current laws is a known quantity; 2026 political landscapes are not.
Cyclical Saturation: With so many owners preparing to sell (the "Silver Tsunami" of retiring baby boomers), the market is expected to see a flood of inventory in the years ahead. Selling now allows you to stand out as a scarce asset before the market becomes crowded with your competitors.
The Rate Cut Window: We are currently in a sweet spot where interest rates are stabilizing or may continue to lower, making leverage cheaper for buyers. This directly translates to the price they can afford to pay you.
5. The Verdict
The data from Pitchbook, PwC, and sector analysts is clear: The industrial M&A market has decoupled from the broader economic hesitation.
For a business generating between $25M and $300M, you currently possess one of the most sought-after asset classes in the United States: a profitable, tangible, US-based industrial operation.
You have built a legacy. The current market conditions offer an opportunity to monetize that legacy at a premium valuation, driven by a convergence of strategic reshoring and pent-up financial capital.
If you are an owner thinking about your next chapter via an exit, recapitalization or divestiture strategy, the current market is sending an unmistakable signal: it is an extraordinary time to be a seller.
I invite you to a confidential, no-obligation conversation to discuss your company’s position, your personal wants and concerns about the “right exit” and a complimentary Market Valuation Analysis for your specific sub-sector to show you exactly how these EBITDA multiples apply to your business today.”
For over 27 years, I’ve been delivering M&A expertise. Vercor and I serve as a trusted partner to help build long term, iterative strategies that ensure you are positioned to meet your unique personal and financial goals whether it is selling, recapitalizing, acquiring or divesting of a division. Call or email me to find out how this data relates to your company.
Todd Cummiskey
Vercor
281-436-7328
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