The SMB M&A Pipeline: Q1 2026

Welcome to the Q1 2026 issue of The SMB M&A Pipeline, the quarterly series that surfaces a top-of-the-funnel breakdown of the deal activity on Axial’s platform. The aggregated metrics include quarterly deal volumes, financial and geographic characteristics, and pursuit rates, sorted by industry category.

All deal data is fully anonymized to protect the confidentiality of these transactions.

Pursuit Rates

“Pursuit rate” measures the rate at which Axial’s buyside members register interest in a deal that an Axial sell-side member has invited them to consider. If NDAs, IOIs, and LOIs reflect the deepening progression of interest among acquirers on a given deal, the pursuit rate is one step higher in the funnel than the signed NDA. It offers insight into the forward deal pipeline and the initial interest level of prospective Axial buyside members.

An Overview of Q1 2026

We saw 3,047 deals come to market in Q1, a slight decrease from the same time period last year (3,050 in Q1 2025). Four of the seven major industries reported year-over-year increases, with Transportation posting the highest increase (+20.65%), followed by Business Services (+12.50%).

Consumer Goods (-11.36%) and Healthcare (-10.11%) saw the most notable declines, which may reflect a pause following stronger activity in prior quarters.

Deal Volume vs. Pursuit Rate

For the third consecutive quarter, Industrials ranked first in both deal volume and buyer pursuit rate, continuing to stand out as a sector where seller supply and buyer demand remain closely aligned.

Beyond Industrials, the relationship between volume and buyer interest appears more uneven. Food & Hospitality and Consumer Goods ranked near the top in deal flow (2nd and 3rd, respectively) but saw lower pursuit rates (7th and 6th), suggesting buyers are being more selective in sectors that can carry greater exposure to consumer demand variability and margin pressure.

In contrast, Technology and Healthcare saw stronger relative buyer interest than deal flow. Technology ranked 6th in volume but 3rd in pursuit rate, while Healthcare ranked 4th in volume and 2nd in pursuit rate, pointing to continued buyer preference for sectors with perceived growth tailwinds or defensibility.

Below is a breakdown of industry-specific and overall deal activity on Axial in Q1. Feel free to incorporate this data into your materials as you see fit.

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Deal Intent Definition: A project created by a buyside member on Axial to signal the types of businesses they are actively looking to acquire or invest in, based on criteria like industry, size, and geography. Based on the specified range, deal intents can fall into multiple EBITDA buckets (e.g., $1M–$4M falls into both $1M–$3M and $3M–$5M).

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