Blog Post
The M&A pipeline is beginning to warm up
Emily Fasold, Deal Origination Editor
Much like New York City, the M&A pipeline in the U.S. is starting to warm up, setting the stage for the comeback year that private credit has been waiting for.
The market’s optimistic mood is strikingly similar to early 2025, when dealmakers shared that they were preparing for the M&A floodgates to “burst open.” Activity ultimately fell flat in the wake of Liberation Day, but we have good reason to believe that 2026 will be different.
Although last year started off quietly, momentum steadily built behind the scenes. Octus’ FY 2025 Direct Lending Analytics report showed that 2025 ended on a high note — with a 37% surge in large-cap deal activity and a 14% increase in the middle market YoY, and M&A activity up 7% and 19% quarter over quarter in Q3 and Q4 respectively, a trend many expect to continue into the new year.
The momentum shows no signs slowing. We’re only a few weeks into 2026, but Octus has already reported on dozens of companies either running sale processes or preparing to launch them in the coming months. The pipeline spans lower middle market to large cap across a range of sectors – not least the software space – with many of them expected to be funded with private credit…
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