One Third of Businesses Are Planning an Acquisition. Are you Ready to Acquire?
Global M&A hit nearly $5 trillion in deal value in 2025, the second highest year on record. And 2026 is shaping up to be just as active.
However, it is important to consider that the market is not rising evenly. According to PwC's 2026 M&A outlook (https://www.pwc.com/gx/en/services/deals/trends.html) , large corporates and well-capitalised buyers are increasingly able to transact through complexity, while smaller players face a tougher environment unless they can articulate a clear strategic edge. Deloitte's M&A Trends Survey (https://www.deloitte.com/us/en/what-we-do/capabilities/mergers-acquisitions-restructuring/articles/m-a-trends-report.html) echoes this: the deals that are getting done in the middle market are going to buyers who are prepared, credible, and move with conviction.
It's an active market but the market is rewarding the ready.
If an acquisition is on your radar in the next one to three years, the question isn't whether the market will be there. It's whether you will be.
Why Most SMEs Aren't Ready to Buy
Most business owners think about acquisitions the wrong way. They wait for the right target to appear, then scramble to figure out whether they can afford it, how they'd finance it, and what they'd actually do with it.
That approach puts you at an immediate disadvantage.
By the time a good business comes to market, the buyers who win are the ones who already have their financing in place (or have a strong line of sight on it), their integration thesis ready, and their financial story prepared. Deals move fast when the right asset is available and the buyers who haven't done the preparation rarely make it to close.
Buy-side readiness is not about having cash sitting on the balance sheet. It's about having done the strategic and financial groundwork before the opportunity arrives.
The Four Pillars of Buy-Side Readiness
1. A clear acquisition thesis
The first question any serious seller, or their advisor, will ask is: why do you want to buy this business?
A vague answer ("it's a good fit," "we want to grow") signals an unsophisticated buyer. A clear acquisition thesis such as being specific about what you're acquiring, why it creates value, and how you'll integrate it signals a buyer worth dealing with.
Your thesis should answer:
What capability, market, or customer base does this acquisition add?
How does it strengthen your competitive position?
What does the combined business look like in three years?
Where are the synergies and how realistic are they?
This is strategic work that needs to be done before you start looking at targets, not after you've found one.
2. Financial strength and clarity
Before you can credibly pursue an acquisition, you need to know exactly where you stand financially. That means:
A clear view of your balance sheet including debt capacity and working capital
Up-to-date financial projections that demonstrate your business's trajectory
An understanding of how much you can afford to borrow and on what terms
A sense of what a combined entity's financials would look like post-acquisition
Sellers and their advisors will scrutinize your financial position carefully. A buyer who can't present clean, credible financials or who discovers their balance sheet has issues mid-process loses deals.
3. Financing structure thought through in advance
How you finance an acquisition matters as much as what you pay.
Most SME acquisitions involve a combination of equity, debt, and sometimes vendor financing. The balance between these affects your cash flow post-close, your risk profile, and your ability to invest in the business after the deal.
The financing landscape in 2026 is genuinely broad. Bank debt, private credit, mezzanine financing, and vendor loans all have a role to play depending on the deal size, the target's characteristics, and your balance sheet. Private credit in particular has become an important tool for mid-market buyers faster than a bank, more flexible in structure, and willing to finance complexity that traditional lenders won't touch.
The buyers who get the best financing outcomes are the ones who understand this landscape before they need it not the ones who start calling lenders after they've signed a letter of intent.
4. Integration planning even before you have a target
The research on M&A is consistent: most deals that destroy value do so not because of a bad acquisition price, but because of poor integration. Culture, systems, people, customers, these are the places where value leaks away after close.
The businesses that integrate well are the ones that have thought about it before they buy. They know what their integration philosophy is, who owns the process, and what success looks like in the first 90 days.
This doesn't mean having a full integration plan for a business you haven't identified. It means having thought through your approach how you bring businesses together, what you protect, what you change, and how fast you move.
What the Market Is Telling Us Right Now
The current environment creates specific dynamics for SME buyers worth understanding.
Geopolitical uncertainty creates opportunities. Periods of uncertainty such as rate volatility, trade disruption, geopolitical tension tend to shake loose assets that wouldn't otherwise be available. Business owners who were planning to hold are reconsidering. Family businesses looking for succession solutions are moving faster. The pipeline of available assets is broader than it was two years ago.
Financing is available but selective. As PwC notes, private credit is providing flexible capital for well-capitalized buyers. But lenders are more selective than they were in 2021–2022. The buyers who get financing are the ones with strong financial stories and credible plans and not the ones who need the acquisition to rescue a struggling business.
Competition is real at the top end, thinner in the middle. Megadeals are highly competitive. But according to Deloitte, the middle and small markets offer significant opportunities for buyers who are prepared and bold enough to act. This is the space where SME acquirers can win.
A Practical Buy-Side Readiness Checklist
Before you start looking at targets seriously, work through these questions:
If you can answer all of these with confidence, you're ready to start looking seriously. If several of them expose gaps, that's where to focus first.
The Bottom Line
The M&A market in 2026 is active, and the middle market is full of opportunity for prepared buyers. But the deals are going to the buyers who have done the work — not the ones who are figuring it out as they go.
Buy-side readiness is a process, not a moment. The businesses that execute the best acquisitions are the ones that spent six to twelve months getting ready before the right target appeared.
If an acquisition is part of your growth strategy, now is the time to build the foundation — not after you've found something you want to buy.
We advise SME leaders on buy-side M&A — from acquisition strategy and financial preparation through to deal execution and financing. If you're thinking about an acquisition in the next one to three years, we'd be glad to have that conversation. https://www.dextraadvisory.ca/
