After two years of market volatility from elevated interest rates, economic uncertainty, and supply chain disruptions, M&A looks ready to rebound in 2026.
Globally, private equity firms have over $2T in dry powder in the keg. With inflation expected to ease and interest rates stabilizing, private market investors are well positioned to kick off a new phase of aggressive dealmaking.
Here are 12 sectors that are primed for high levels of M&A activity this year.
Key Takeaways
- M&A activity in the US is expected to rebound in 2026 as confidence among PE and corporate players rises. US-based PE firms are sitting on around $1T of dry powder.
- AI advancement is the name of the game. Private market dealmakers across industries will target AI-powered solutions that drive efficiency and lower costs.
- Shifting regulations and government incentives will have strong influence over deal activity in key industries including healthcare, supply chain, semiconductors, and cybersecurity.
Sectors to Watch
Enterprise AI & Software
Enterprise AI and software will likely be a hotbed of M&A activity in 2026. More companies are looking to gain a competitive edge from automation, data analytics, generative AI, and proprietary machine learning (ML) models. At the same time, the pool of high-level AI experts available for hire is relatively small.
As a result, expect to see consolidation in the space this year. Watch for roll-ups of niche players and cross-sector platform builds. Strategic acquirers will likely pursue opportunities in large language models (LLMs), vertical-specific AI solutions, and workflow automation tools.
Read Grata’s PE Playbook: Software Development Tools here.
Cybersecurity
With rising digitization comes rising cyber threats. Cybersecurity is imperative for companies across virtually all major industries. Buyers are targeting differentiated technologies, recurring revenue opportunities, and global distribution channels as businesses prioritize risk mitigation and compliance.
In 2026, expect M&A activity to ramp up in endpoint protection, extended detection and response (XDR), identity and access management (IAM), and zero-trust security frameworks.
Semiconductors
The AI boom is also driving demand in the semiconductor industry. AI data centers are popping up more and more, requiring high-performance chips. Companies offering GPUs, custom processors, and memory solutions could see consolidation in 2026 as enterprises optimize for capacity and efficiency.
Many businesses are also looking to boost resilience in their supply chains to achieve semiconductor independence and align with government initiatives, such as the CHIPS Act. These companies could leverage strategic acquisitions to achieve their goals.
Electrical Services
M&A activity in the electrical services industry has steadily risen over the last 10+ years, driven by factors including electrification initiatives and the rise of renewable energy. Expect that trend to continue in 2026. Significant industry fragmentation and strong cash flow make electrical services businesses attractive to both strategic and financial acquirers.
Watch for roll-ups of regional operators and acqui-hires of specialty contractors. Buyers will likely leverage these acquisitions to scale and broaden their offerings to support grid modernization, building electrification projects, and more.
HVAC
Like electrical services, HVAC is an essential industry that has seen rising activity over the last decade. That momentum will continue in 2026. HVAC businesses are ripe for acquisition as aging building systems require replacement and adoption of advanced climate control technologies ramps up.
The market’s fragmentation, predictable service contracts, and recurring revenue from maintenance will appeal to private market dealmakers — especially where there are opportunities to combine with adjacent services.
Read Grata’s PE Playbook: HVAC report here.
Landscaping
Landscaping services, particularly in the commercial and residential sectors, are in high demand due to rising real estate development, outdoor living trends, and sustainability initiatives.
A high percentage of independently owned companies makes the industry a prime target for private market dealmakers in 2026. The industry’s recurring revenue from maintenance services and the ability to scale through geographic expansion and service diversification are also appealing from a roll-up standpoint.
Read Grata’s PE Playbook: Landscaping & Property Maintenance here.
Advanced Manufacturing
Advanced manufacturing — which includes precision machining, robotics integration, and high-performance materials — is gaining momentum as businesses seek to reshore their supply chains and as demand for customized, high-value components.
In 2026, expect acquirers to target technologies that enable automation, quality control, and flexible production capacity. Additionally, watch for government incentives and defense-related contracts sparking activity in the sector.
Construction & Engineering
The construction and engineering sector is poised for consolidation in 2026 as demand for infrastructure, commercial development, and complex, multidisciplinary projects grows.
Companies with strong project management systems, digital delivery tools, and specialty engineering expertise will be particularly attractive to private market dealmakers. M&A offers a way for strategic buyers to augment technical capabilities, enter new geographies, and better compete for large public and private contracts.
Read Grata’s PE Playbook: Construction here.
Clean Energy Infrastructure
Clean energy infrastructure will be a key investment area for private market dealmakers in 2026. Decarbonization targets, regulatory support, and corporate ESG commitments are accelerating renewable energy adoption, energy storage, and grid modernization.
M&A activity will likely be focused on scaling project pipelines, acquiring development expertise, and integrating asset management capabilities.
Read Grata’s PE Playbook: Clean Power Infrastructure here.
Aerospace & Defense
With rising geopolitical tensions and shifting national security priorities, expect to see elevated M&A activity in the aerospace & defense industry this year. Next-generation solutions in defense technology, munitions, and satellite tech will likely be key focus areas for dealmakers.
Watch for PE firms to leverage carve-out strategies and invest in mid-sized defense suppliers as they look to build scalable platforms for both the military and civilian sectors.
Read Grata’s PE Playbook: Space Tech here.
Supply Chain & Infrastructure
More companies are prioritizing resiliency, near-shoring, and real-time visibility in their supply chains amid e-commerce growth and new industrial policy incentives. Logistics, distribution centers, freight tech, and automation solutions are expected to see strong M&A activity in 2026 as a result.
Watch for strategic acquirers to be active in the space as they work to expand their footprints, shorten delivery times, and integrate vertically essential nodes of their supply chain.
Outpatient Healthcare Services & Tech
Outpatient healthcare services and companies that offer supporting technology will be compelling targets in 2026 as care increasingly shifts out of hospitals into ambulatory settings.
Expect dealmakers to prioritize solutions designed to improve patient outcomes and lower costs, including coordinated care platforms, telehealth integration, and practice management tech.
Read Grata’s PE Playbook: Healthcare Practices here.
Win More Deals in 2026 with Grata
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