Financial decision-makers are entering the final stretches of 2026 with a notable wave of confidence, though significant structural hurdles continue to prevent deals from crossing the finish line.
According to a new mid-market M&A survey released by TD Bank, 64% of dealmakers expect transaction volumes to increase over the next 12 months, and two-thirds (67%) agree that baseline market conditions are actively improving. However, severe valuation gaps between buyers and sellers, alongside complex capital structures, continue to dictate a cautious approach to closing.
The findings stem from an on-site survey conducted among private equity professionals, corporate executives, and capital allocation leaders at the ACG DealMAX® conference in Las Vegas.
While a shortage of capital is rarely the issue in today’s market, deploying those funds effectively has become a distinct bottleneck. The survey highlighted a deep-seated friction in current financing environments:
- 36% of respondents state that capital is readily available but highly difficult to structure efficiently.
- 28% of respondents note that the elevated cost of capital is actively stifling deal viability.
- Only 26% believe capital is both abundant and easy to deploy smoothly.
“Middle Market dealmakers are telling us the appetite is there, but the bar for getting deals done is higher,” Kory Wilcox, head of Middle Market Financial Sponsor Coverage and Buy-Side Loan Syndication at TD Bank said. “Capital is available, but buyers and sellers still need to get aligned on value, structure, and execution. In practical terms, the deals moving forward are the ones where both sides have confidence in the economics and a clear path to close.”
The primary drag on modern deal flow is a fundamental disagreement over what companies are actually worth. A staggering 77% of respondents cited valuation misalignment between buyers and sellers as their primary operational challenge. Other notable headwinds include macroeconomic/geopolitical volatility (46%) and a visible scarcity of top-tier, high-quality assets (44%).
Because of this, dealmakers believe the ultimate catalysts needed to jumpstart rapid market activity over the coming year will be greater valuation alignment (40%) and broader economic stability (33%).
| Top Obstacles Stalling M&A | % of Dealmakers Citing |
| Valuation Misalignment (Price) | 77% |
| Macroeconomic & Geopolitical Volatility | 46% |
| Limited Supply of High-Quality Assets | 44% |
With so many variables bogging down negotiations, financial institutions that can guarantee a quick, predictable path to closing are winning the market. More than half of respondents (57%) stated that “speed and certainty of execution” is the most valuable asset a banking partner can provide right now. Flexible, customized financing structures (47%) and deep, sector-specific industry expertise (46%) also ranked highly.
As the industry pushes deeper into the year, the data indicates that market players aren’t necessarily sitting on the sidelines—they are simply operating with unprecedented discipline.
“This is a market where preparation matters,” Wilcox added. “The firms that come to the table with clarity and the right partners will be better positioned to move as opportunities arise.”
