Why Both Private Equity and Strategic Buyers Are Active Right Now
Private Equity and Strategic Buyers Are Both Moving — Here's What That Means for You
If you are a business owner thinking about your next move, or a company eyeing a merger or acquisition to accelerate growth, 2026 is a year worth paying attention to. Both private equity firms and strategic corporate buyers are active — and the competitive dynamics between them are shaping deal terms and valuations across the market.
Here's what's happening and why it matters.
Private Equity Is Back — and It's Playing a Long Game
After a few slower years marked by high interest rates and cautious dealmaking, private equity has roared back. Global private equity transaction value reached nearly $2 trillion in 2025, up from approximately $1.6 trillion in 2024.¹
That rebound didn't come from PE firms suddenly abandoning discipline. It came from a strategic pivot: rather than concentrating on large platform acquisitions that require heavy negotiation and face intense buyer competition, many sponsors are growing their existing portfolio companies through add-on acquisitions — smaller, targeted deals that build scale without the same complexity or cost. After ending a multi-year slowdown, PE participation in middle-market deals has climbed steadily, and the preference for add-ons over big platform bets has become a defining feature of how sponsors are deploying capital right now.²
Private Equity's Add-On Strategy in Practice
The add-on playbook is showing up across a wide range of industries. In fragmented, service-based sectors — think home services, professional services, healthcare — PE firms are acquiring smaller operators and folding them into a centralized platform. The individual businesses may be too small to attract meaningful standalone attention, but bundled together under a well-capitalized sponsor with a clear operational thesis, they become something significantly more valuable.
We're seeing this particularly in professional services. Accounting, wealth management, and financial advisory businesses have become prime targets: predictable revenue, recurring client relationships, and sufficient fragmentation to build scale through consolidation. The same dynamic is playing out in healthcare services, specialty trades, and technology-enabled business services.
At the larger end of the market, PE has also been behind some notable headline transactions — take-privatizations that allow sponsors to execute on strategy and transformation away from the scrutiny of public markets, with the expectation of returning those companies in a stronger position down the line.
Strategic Buyers Are Moving with Urgency — Especially Around AI
While Private Equity is executing a disciplined add-on strategy, strategic corporate buyers are moving with a different kind of urgency. Companies with a balance sheet and a long-term vision are making decisive acquisitions — particularly to capture AI capabilities before their competitors do. Corporate dealmaking has accelerated meaningfully in 2026, and the assets attracting the most attention — and the highest valuations — are those with AI-ready capabilities baked in.
Two of the most significant deals illustrating this trend are Google's $30 billion acquisition of Wiz (a cloud security company) and Palo Alto Networks' $25 billion proposed acquisition of CyberArk. Both reflect strategic buyers building vertically integrated, AI-ready platforms rather than waiting to develop those capabilities in-house.³
Strategic buyers are also getting creative when they can't — or don't want to — acquire a whole company. A structure sometimes called a "mega-acquihire" has emerged as a defining feature of AI-driven M&A: rather than purchasing a company outright, a buyer hires the key talent and licenses the core technology. This approach lets a strategic buyer capture what it actually needs — people and IP — while sidestepping a full acquisition and the regulatory review that can come with it.
Google's July 2025 transaction with AI coding startup Windsurf is a prime example. After a planned $3 billion acquisition by OpenAI collapsed, Google structured a $2.4 billion deal in licensing fees and compensation — securing Windsurf's CEO, co-founder, and senior R&D team for its DeepMind division, along with a nonexclusive license to Windsurf's technology, without taking any equity stake in the company.⁴ As Reuters reported, the deal structure mirrors a broader pattern across Big Tech, with Microsoft, Amazon, and Meta each employing similar arrangements to secure top AI talent and technology access through deals that fall short of full acquisitions — and the regulatory scrutiny that comes with them.
What This Market Means for Buyers and Sellers
The competitive dynamic between PE and strategic buyers has real implications for anyone considering a transaction.
If you're a seller, competition between financial and strategic buyers generally works in your favor. High-quality assets are attracting multiple interested parties, and well-prepared sellers are in a strong position to negotiate — both on price and on terms. In our experience, the sellers who achieve the best outcomes are those who understand which type of buyer is most likely to value their business, and who come to the table with clean financials, a clear growth narrative, and legal documentation that doesn't create last-minute complications.
If you're a buyer, preparation and differentiation matter more than speed. PE firms that can demonstrate value-add beyond price — through operational expertise, sector knowledge, or a clear growth plan — are winning deals. Strategic buyers who come with a clear integration thesis are doing the same. In a market where quality assets attract multiple bidders, your ability to move efficiently and credibly is as important as the number you put on the page.
In either case, having experienced legal counsel in your corner from the start isn't optional — it's how you make sure the opportunity you identify actually closes the way you intend.
The Takeaway
Private equity and strategic buyers are both active, well-capitalized, and moving with purpose. Whether the deal is a disciplined add-on that quietly builds a platform or a multi-billion-dollar AI acquisition that reshapes an industry, the through-line is the same: buyers and sellers with clear strategies, flexible structures, and strong legal foundations are the ones getting deals done. If you're thinking about a transaction, the best time to build that foundation is before you get to the negotiating table.
Reach out to the Parsus M&A team to talk through your situation.
Sources
¹ PwC, "Global M&A Trends in Private Equity and Principal Investors: 2026 Outlook." https://www.pwc.com/gx/en/services/deals/trends/private-equity.html
² Capstone Partners, "Merger and Acquisition Outlook 2026," December 2025. https://www.capstonepartners.com/insights/merger-and-acquisition-outlook-2026/; Carr, Riggs & Ingram, "How Private Equity Investment and Deal Activity Are Expected to Shape the Market in 2026," February 2026. https://www.criadv.com/insight/private-equity-investment-deal-activity-2026/
³ PwC, "Global M&A Industry Trends: 2026 Outlook." https://www.pwc.com/gx/en/services/deals/trends.html
⁴ Reuters, "Google hires Windsurf execs in $2.4 billion deal to advance AI coding ambitions," July 11, 2025. Note: the $2.4 billion figure was reported by Reuters based on a source familiar with the arrangement, not a formal company disclosure.