Every CEPA paying attention right now is fielding the same question from business owner clients. Is this the right time?
It’s the right question — and it’s rarely just about the market. For most lower middle market founders, the decision to transition isn’t purely financial. It’s about what happens to their employees, their customers, and the business they spent a lifetime building. The legacy question comes before the valuation question. It almost always does.
What the market tells us right now is this: the window to achieve both — a strong outcome and the right outcome — is opening. Private equity is sitting on nearly $2 trillion in buyout-focused dry powder. Platform acquisitions have been largely absent for two years. The post-tariff rebound now converging with that capital pressure is creating conditions that prepared sellers haven’t seen in years. CEPAs who understand what’s driving it — and who help clients prepare early — will create more options and better outcomes when transition opportunities emerge.
How We Got Here: A Three-Year Market Recap
To understand where 2026 is headed, you need to rewind to 2024. That year’s M&A activity was largely defined by add-on acquisitions — private equity portfolio companies growing through acquisition rather than organic means. Add-ons are strategic buys: the acquiring entity can justify premium multiples because of synergies. But they are also smaller deals, which means deploying large amounts of capital quickly is difficult when add-ons dominate the pipeline. According to Bain & Company, add-ons now represent more than 75% of all PE buyout activity — a direct symptom of GPs deploying incrementally through existing platforms because building new platform positions takes time they’re running short on.
Then came early 2025. Tariff volatility gripped the macroeconomic conversation and the M&A market responded with a pause — not a full shutdown on the scale of 2008–2009, but a meaningful hesitation. Middle market deal volume through much of 2025 was underwhelming, with tariff shocks and macroeconomic uncertainty making it harder for mid-sized firms to chart a clear path to higher revenues and strong margins.
The second half of 2025 saw a rebound. Deal volume picked up in Q3 and Q4, but the headline dollar numbers were largely inflated by a small number of very large transactions. Deal count remained below expectations. The sell-side inventory — quality companies willing and ready to transact — was still thin.
“The quality of the sell-side inventory has been the real problem,” notes REAG Founding Partner Scott Mashuda. “You have to put a little bit of track record down since the tariffs. Companies that are of size and quality are going to start to transact in the next 12 to 18 months.”
What’s Different in 2026: The Platform Acquisition Return
Here is where it gets interesting for CEPAs. Private equity cannot deploy nearly $2 trillion through add-on acquisitions alone. Carlyle’s April 2026 market analysis confirmed that figure — nearly $2 trillion across buyouts, growth, and venture capital — while noting that overall transaction volumes remained subdued in Q1 2026. That gap between capital available and capital deployed is exactly the pressure that drives platform acquisition cycles.
The aging of that capital makes the pressure more acute. McKinsey’s February 2026 Global Private Equity Report found that more than 40% of the dry powder ready for deployment by GPs today has been available for the past two years — 15 percentage points higher than the five-year average. Aging capital isn’t patient capital. It’s capital under deadline.
The businesses that are of size and quality — or are actively working toward that standard through the value acceleration process — are likely to see increased buyer interest in H2 2026 and into 2027. But getting in front of the right buyers is only part of it. REAG’s process includes non-financial analysis — systematically evaluating what spreadsheets miss. Leadership depth, operational scalability, management team independence from the founder, customer relationship transferability. These are the factors sophisticated buyers scrutinize in diligence, and they are the same factors that determine whether a business commands a premium or gives one back.
For business owners with $2M or more in EBITDA and scalable operations, the convergence of aging dry powder and returning platform acquisition appetite creates a sellers’ market in the making. The question is preparation — and the clock is already running. Learn more about how REAG works with lower middle market business owners through legacy transitions.
The Timeline Math That Every Business Owner Needs to Hear
One of the most effective tools in a CEPA’s arsenal is also the simplest: walking a business owner backwards from their desired exit date. The timeline tends to be sobering in the best possible way.
If a client wants to exit in five years, a buyer will typically require a one-to-three year post-close transition period. Add a 9-to-12 month M&A process. Add 12-to-24 months of deal prep — financial record cleanup, management team development, customer concentration reduction. Work backwards and you arrive at the same conclusion every time: they needed to start yesterday.
This framework is particularly effective because it removes the abstraction of exit planning and replaces it with unavoidable arithmetic. The conversation shifts from someday to so what are we waiting for?
The defining advantage for business owners in 2026 is optionality — the ability to choose, not the obligation to act. Optionality requires time. Time requires starting now. Owners who are in process or preparing now have options that owners waiting for calm simply don’t.
Most successful transitions aren’t the result of perfect market timing. They’re the result of preparation. Strong markets reward prepared businesses. “Challenging markets expose weaknesses that already exists,” says REAG Founding Partner Todd Torquato. “The goal isn’t to predict the future. It’s to create optionality so owners can make decisions from a position of strength. “A favorable market doesn’t create a successful transition. Preparation does. The owners who will have the most options in 2027 are already doing the work in 2026.”
Preparation Creates Opportunities in M&A
REAG’s founding partners have seen the cost of waiting play out in real transactions. One case that illustrates the stakes involved a manufacturing company in the hunting apparel niche. Pre-COVID, the business was underperforming and a sale was not feasible at acceptable terms. Then COVID hit. Demand surged. Revenue went through the roof.
REAG reached out and advised the owner: this is your window. The response was understandable but ultimately costly — why would we sell now? We’re doing great. The owner waited. Within a couple of years, conditions normalized and the post-COVID demand spike that made the business exceptional had faded. The window had closed.
The lesson wasn’t that buyers were uninformed. It was that extraordinary market conditions had temporarily expanded the owner’s options, and those conditions were unlikely to last indefinitely. The right buyer may have had the capital, infrastructure, or strategic advantages needed to sustain and grow that performance beyond what the owner could reasonably achieve on their own.
“Every business will transact at some point. The question isn’t whether it happens. The question is whether the owner is positioned to act when the right opportunity presents itself. The right outcome isn’t determined by price alone. It’s determined by finding a buyer with the experience, resources, and vision to build on what the owner has spent a lifetime creating.” — Scott Mashuda, REAG
Middle market deals that closed in 2025 were typically either true industry leaders that received strong valuations from a competitive buyer pool, or average companies that faced significant headwinds to close. The bifurcation is real. Prepared sellers transacted well. Unprepared sellers struggled or didn’t transact at all. The platform acquisition window opening in H2 2026 will follow the same pattern. See how REAG has helped founders navigate this in our case studies and closed transactions.
How CEPAs Engage REAG Earlier to Create Better Outcomes & Win New Clients
One of the more underutilized strategies in the CEPA community is using REAG’s M&A capabilities as a business development asset — not just a referral at the end of an engagement.
Several RIA firms working within the CEPA model have brought REAG into their initial business owner pitches. The positioning: we don’t just manage your wealth — we have a team to handle the transaction that creates it. REAG presents alongside the advisor, covers two of the three legs of the stool, and the advisor closes the wealth management relationship. In multiple cases, business owners who were not initially clients became clients specifically because of the credibility the combined pitch created.
Other advisors have invited REAG to co-present at industry events — speaking directly to business owner audiences about the legacy transition process. REAG covers the M&A mechanics. The CEPA covers the financial planning dimension. The arrangement drives business owner client acquisition with no hard pitch required.
The key is early engagement. REAG intentionally operates across all three of EPI’s exit planning gates — Discover, Prepare, and Decide — rather than entering only at the point of transaction. That means REAG can be a resource for you well before a client is ready to sell, without pressure to generate a transaction prematurely. Everything from due diligence checklists to pre-engagement guides lives in the free REAG CEPA portal.
REAG serves clients across its core industries — manufacturing and fabrication, chemicals, specialty plastics, distribution and logistics, electronic manufacturing services, and building products — which map closely to the business owner client base most CEPAs work with in the lower middle market.
What CEPAs Should Do Before the Window Closes
The question for CEPAs isn’t whether the platform acquisition cycle returns. The question is whether your clients will be prepared when it does.
The owners and advisors moving in this environment aren’t ignoring the risks. They understand them — and they’ve done the work to build businesses that are less vulnerable to them. As a CEPA, your role is to make sure your clients are in that group.
Start the conversation earlier than feels necessary. The timeline math above is unforgiving. If a client is five years from their desired legacy transition, the conversation about engaging an M&A advisor should be happening today — not in three years. Carlyle’s Q1 2026 analysis shows deal activity beginning to pick up after a soft start to the year. Clients who are in preparation now will be ready when that momentum accelerates.
Engage REAG earlier in the exit planning process, not just at the point of referral. REAG will co-present with you, attend your client events, and help you win business owner clients who then become long-term wealth management relationships. The partnership is designed to benefit your practice across all three gates, not just facilitate a transaction at the end. Learn more about how REAG partners with CEPAs.
Know what buyers are actually paying for right now. In today’s market, buyers are selective — but when they find a business that meets their criteria, they pay for certainty. Clean financials, diversified customer base, strong management, scalable operations, leadership that isn’t dependent on the founder. That profile doesn’t happen by accident. It’s built over time, with the right advisors, starting well before a transaction is imminent. REAG’s strategic planning services are built exactly for this stage.
Access the CEPA portal. Due diligence checklists, information gathering guides, and pre-engagement resources are all available at CEPA Portal at no cost. If you’re not using it, you’re leaving a resource on the table.
Next Steps With REAG
REAG is a boutique advisory firm specializing in lower middle market M&A advisory, debt advisory, transaction readiness, and turnarounds and restructuring, serving companies with up to $250M in revenue and $25M in EBITDA across the United States. With 100+ closed transactions across 25+ industries and 20+ years of experience, we bring real market intelligence to every engagement — and a human-centered approach to every founder’s legacy transition.
We understand that no two owners approach this decision the same way. The right outcome isn’t defined by price alone — it’s defined by how well it aligns with the owner’s goals, their people, and what comes next for them. Whether your client is thinking about a transition in one year or five, preparation creates optionality. The conversation starts the same way: confidentially, honestly, and on their terms.
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Since 2004, REAG has been a trusted advisor to lower middle market business owners through transition, growth, and transaction events. We deliver winning outcomes by combining deep financial acumen, sector insight, and a human-centered approach.
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