The U.S. M&A market is heating up and entering a new era of strategic expansion. While big transactions are reshaping entire industries, private equity firms are now courting smaller deals they used to shun – and redeploying record dry powder along the way. “PE profits have slumped for years – and that is putting everything on the table,” said Evan Berta, an associate at Hunt Scanlon Ventures, who takes us inside the just-released EY-Parthenon M&A Outlook report.
The newly released EY-Parthenon Deal Barometer, developed by chief economist Gregory Daco and Mitch Berlin, EY-Parthenon Americas vice chair, projects sustained deal momentum through the next 18 months.
Year-to-date deal value has already risen 36% compared to last year, driven by a rising share of billion-dollar deals, which now account for 27% of deal count, underscoring the continued strength of the market’s recovery.
The report highlights that the share of U.S. deals exceeding $1 billion has grown from a pre-COVID average of about 22% to 27 % in the first three quarters of 2025.
“Dealmaking reaccelerated in Q3,” Mr. Berlin notes, “capped by an exceptionally busy month of September in both volume and value.”
“Dealmaking reaccelerated in Q3, capped by an exceptionally busy September in both volume and value.”
With large-scale transactions once again dominating the landscape, companies are increasingly treating M&A as a primary path to transformation rather than just stabilization.
M&A as a Primary Path to Transformation
EY-Parthenon projects that private-equity-backed deal volume will increase approximately 8% this year, followed by a further 5% gain in 2026. This rebound reflects improving exit dynamics, less restrictive debt markets, and record un-invested capital.
“At the intersection of deployment and value creation, leadership alignment is now the differentiator,” said Evan Berta, an associate at Hunt Scanlon Ventures. “PE firms that combine scale with executive talent are pulling ahead.”
The report emphasizes three inter-connected growth pillars – affluent consumers, an AI-led investment boom, and asset-price appreciation – which together support continued deal-making momentum.
At the same time, EY cautions that any meaningful disruption to these pillars, for example tariff policy, asset-price collapse, or inflation shock, could trigger a ~3% drop in deal volume in its downside scenario.
Talent as the Value Creation Engine
In a market where scale and speed matter, leadership is emerging as a core investment variable. “We’re seeing investors recognize that leadership quality is no longer a post-close concern, it is a pre-close driver of value,” said Mr. Berta.
“PE firms that combine scale with executive talent are pulling ahead.”
Mr. Berlin’s analysis reinforces this view: “We estimate that total U.S. deal volume will rise 3% in 2026, following an anticipated 9 % gain in 2025.” The message is clear: buy the team, not just the target.
Corporate Buyers and PE Sponsors Turn to Leadership
EY’s baseline outlook suggests 2026 will be defined by execution rather than expectation. Corporate buyers and PE sponsors alike are turning to leadership, process, and culture as the next frontier of value creation.
“Capital will always drive deals,” said Mr. Berta. “But it is leadership that determines whether those transactions create lasting value.”
In a deal world returning to form, the winners won’t just be those who deploy capital – it will be the ones who build talent, he said.
Article By
Evan Berta
Evan Berta is an Associate at Hunt Scanlon Ventures, specializing in data analysis, market mapping, and target list preparation. He plays a critical role in identifying and building out groups of firms in sectors of interest, including preparing strategic overviews of top potential targets for acquisitions. Evan’s analytical expertise supports the firm’s sourcing initiatives, particularly in identifying niche and emerging market opportunities, and delivering actionable insights on tight timelines.
