Why AI Is About to Trigger a Wave of M&A Transactions
February 2026
In 26 years of advising on mid-market M&A transactions, we have seen plenty of cycles. But what is happening right now with artificial intelligence is different. This is not another technology trend that business owners can wait out. AI is reshaping how companies operate, how they are valued, and how quickly entire industries can be disrupted. And it is creating a new dynamic in the M&A market.
“Get Me Out” Meets “Get Me In”
On one side of the table, established business owners, many of them in their late fifties and sixties, who have built successful companies over decades and are now looking at AI and thinking “I do not want to spend the next five years figuring this out.” They want out while their business still commands a strong price. On the other side, younger, tech-savvy buyers and private equity firms are looking at those same businesses and thinking “that is exactly what I want to buy, because I know how to bolt AI onto it and unlock value the current owner cannot.”
This is not just an Australian story. Global M&A value rose 41% in 2025 to US$4.8 trillion.1 PwC found that roughly a third of the 100 largest deals last year cited AI as a strategic driver.2 That tells you where the money is flowing.
The Seller Mindset
Business owners’ conversations have changed noticeably over the past 12 months. Three themes keep coming up.
They are tired. These are people who have already navigated digital transformation, cloud migration, social media, COVID. They have adapted and survived every time. But AI feels different in scale. KPMG’s latest survey of Australian business leaders found that AI and disruptive technology has surged to their number-one concern, overtaking cost pressures and talent issues that dominated in previous years.4
They are worried about value erosion. Smart owners understand that if AI fundamentally changes their industry’s cost structure, their business could be worth less in three years than it is today. That is a powerful motivator to sell now.
The timing is right anyway. Many of these owners are Baby Boomers who were already thinking about succession. AI is not creating the exit conversation; it is accelerating it.
The Buyer Mindset
On the buy side, there is real appetite. EY-Parthenon surveyed 1,200 CEOs across 21 countries and found that 53% plan to pursue acquisitions in the next 12 months, with AI and digital transformation among the top strategic drivers.3 The Australian market reflects this momentum. Private equity take-private activity surged in the second half of 2025, with Ashurst documenting premiums above 50% on quality targets, driven by available capital and motivated sellers.5 MinterEllison confirmed the mid-market has returned as the epicentre of Australian deal activity.6
The buyers are not just buying revenue. They are buying customer bases, market positions and operational platforms that they plan to transform with AI. The playbook has changed.
What This Means If You Own a Business
If you are a seller, the conditions right now are favourable. Buyer appetite is strong, capital is available, and valuations for quality businesses remain healthy. But buyers in 2026 are more sophisticated than ever. They expect clean financials, documented processes and a clear growth narrative.
If you are a buyer, the coming wave of exits will create genuine opportunities to acquire established businesses from motivated sellers at reasonable valuations. The key is being ready: financing in place, criteria defined, integration plan thought through.
Either way, the businesses that act decisively during periods of disruption are the ones that come out ahead.
If AI has you thinking about your options, we welcome a confidential conversation.
Author: Tony Brown | DMA | divestmergeacquire.com.au
References
1. Morrison Foerster, “M&A in 2025 and Trends for 2026,” January 2026. mofo.com/resources/insights/260115-m-a-in-2025-and-trends-for-2026
2. PwC, Global M&A Industry Trends: 2026 Outlook, January 2026. pwc.com/gx/en/services/deals/trends.html
3. EY-Parthenon CEO Outlook Survey, Q4 2025. Survey of 1,200 CEOs across 21 countries. ey.com/en_gl/newsroom/2026/01/ceos-double-down-on-ai-transformation-and-m-and-a-to-drive-growth-amid-uncertainty-in-the-global-economy
4. KPMG Australia, Keeping Us Up at Night survey, January 2025. kpmg.com/au/en/media/media-releases/2026/01/ai-biggest-concern-for-australian-business-leaders-in-2026-and-beyond.html
5. Ashurst, “Top 5 M&A trends for 2025 and predictions for 2026.” ashurst.com/en/insights/top-5-m-and-a-trends-for-2025-and-predictions-for-2026/
6. MinterEllison, “Your public M&A wrapped: Top trends from 2025 and outlook for 2026.” minterellison.com/articles/mergers-acquisitions-top-trends-from-2025-and-outlook-for-2026
