Buysiders’ H1 Recap

H1 is officially in the books, which means that Europeans are on vacation - especially with the World Cup ongoing. Although, I am not sure from a deal flow perspective we will miss their presence.

Those of you who have been reading for a while may have noticed that in H1’26 I have had a smaller number of interesting deals to cover. If you didn’t notice that, I accept Venmo or Zelle if you want to tip your waitress.

If you did notice this - you aren’t wrong. There was less quantity of deals to write about in H1, but that doesn’t mean that H1 was bad.

In fact, H1 2026 was the strongest first half for global M&A since records began. $2.85 trillion in announced transactions, up 50% from H1 2025. Q2 alone posted $1.6 trillion, a quarterly record.

There were 47 deals above $10 billion, totaling $1.3 trillion, meaning the 47 largest transactions - out of roughly 24,000 - accounted for almost half the entire market by value.

Now, I know I sound like your MD cherry-picking the league tables to justify ranking above Goldman, but genuinely, H1 is one for the record books.

Total deal count fell roughly 9% versus H1 2025, the weakest first-half count in six years. Fewer deals, sure, but they were dramatically bigger ones.

JPMorgan’s North America co-head of M&A, Charles Bouckaert, told Bloomberg: “The bigger, more high profile, more complex stuff is a very big part of the market, which is pretty unusual.”

Tom Miles, Morgan Stanley’s global M&A co-head, put it simpler: “People have just accepted the volatility and are investing through it as opposed to waiting until it’s over.”

So with the stage set, I give you Buysiders’ H1 wrapped. It’s like a Spotify wrapped, but worse because instead of a reminder of what brought you joy this year, it’s a reminder of all the deals you missed out on because you were pitching a 5-way merger that would be the largest fee event in bank history instead of working on the SpaceX IPO.

_{PRESENTED BY TOLTIQ}

PE Firms Are Making a Third of the Bets at Four Times the Size

The midyear numbers are in.

PE deal volume fell 34% in the first half while average deal size nearly quadrupled. Capital is crowding into fewer, higher-conviction deals. Diligence windows, meanwhile, haven't gotten any longer. Most deal teams still review the top contracts by value, sample the rest, and assume nothing important is buried in the remaining few hundred agreements. These new trends, however, are forcing firms to seek custom-built AI solutions for the full lifecycle of the deal.

That is why PwC recently embedded ToltIQ across its Deals practice. The platform handles the document-heavy front end of a deal - ingesting, classifying, and cross-referencing thousands of data room files - so teams get a searchable view of the entire room from day one and spend their time on judgment and client conversations instead of laborious review work. The beauty of the platform is that each finding is cited back to the underlying document, so it is fully auditable. Built by a former Partner and CIO at KKR, ToltIQ knows the industry.

Book some time to demo the platform and see it firsthand.

Riding the H1 Waves

Q1 was driven by mega-deals and a single extraordinary outlier. SpaceX’s acquisition of xAI in February 2026 at a revised combined valuation of approximately $250 billion accounted for nearly 30% of total Q1 deal value by itself. Remove that one transaction and Q1 was strong but not record-setting. S&P Global’s Q1 data showed only 7,924 deals announced globally.

That’s a 30% drop from the prior year, not an auspicious start for banks who make their money on volume and are cut out of larger deals. Interestingly though, the aggregate value of deals in Q1 was $861.1 billion, the strongest Q1 since 2021. The K-shape was already visible in January: megadeal values up 40% year-on-year, mid-market volumes down materially. Check in on your non-megafund PE friends who told you their carry was worth millions. 

Q1 also saw the announcement of two other landmark deals your Buysiders subscription covered in depth: McCormick’s combination with Unilever Foods in a $44.8 billion Reverse Morris Trust, and BlackRock/GIP and EQT’s definitive agreement to acquire AES Corporation for $33.4 billion. For those of you keeping score, that’s three transformational transactions in the first quarter alone.

Q2 was more of the same. NextEra’s $66.8 billion acquisition of Dominion Energy came in May. Shell’s $22 billion purchase of ARC Resources in Canada came in April. The Paramount-Warner Bros. Discovery combination at $111 billion, which had been announced late 2025, navigated its shareholder approval in April and is now in regulatory review. Given Trump has free time with the US out of the World Cup, he may turn his attention back to this one.

Additionally, SpaceX’s $60 billion all-stock acquisition of Cursor landed in June days after its IPO. Q2 2026 was, individually, the single largest quarter for M&A deal value in history at $1.6 trillion. For those of you wondering if you will reap the rewards in bonus season, I remind you of the Ray Dalio quote: “ever notice how the cashflow never seems to be flowing towards you.”

What drove both quarters was the same thing. In fact, it was so obvious that even PwC picked up on it, and we know those middle-to-back office guys have never done an actual deal. Granted, the trend is so obvious that if you missed it, you may as well join Jim Cramer on CNBC.

In their mid-year report PwC pointed out that “AI is redirecting capital towards data centers, power, grid infrastructure, and frontier platforms while forcing buyers to reassess which sectors and business models are most exposed to disruption.”

It’s hard to argue with that hard hitting analysis by PwC, I mean these are the direct competitors of the guys who told NYC that trash cans would solve its trash problem, so what can we really expect.

Ribbing them aside, the trend is there. Most of the deals of consequence in H1 2026 can be split into three categories: (1) companies buying AI capability, (2) companies buying the energy to run AI, and (3) companies restructuring themselves to compete in a world where their existing business model is getting disrupted by it (shoutout Allbirds for the all time pivot from shoe company to AI company in 2026).

Sector by Sector Review

Sure, the aggregate numbers are all well and good, but let’s roll up our sleeves and look across sectors. After all, we have seen a pretty wide breadth of deals already this year, and this is coming from the guy who typically writes about food deals. Though I have been forced to be more original in H1’26 and I thank you, the bankers, for giving me variety.

Technology pulled in $649 billion, up 90% year-on-year and was the largest sector by value.
Ninety percent growth year-on-year is sweet, but always read the footnotes. Have you never opened a CIM? The fine print is that a significant portion of that is SpaceX-related. Strip the SpaceX/xAI merger and the Cursor acquisition, and you still have strong underlying tech M&A, but the headline multiple is inflated. What’s real and structural is the AI coding and infrastructure subsector, which attracted more capital in the first six months of 2026 than it had in any prior full year.

The pattern in tech M&A is now reliably: large strategics buying AI tooling companies (Qualcomm/Modular for $4 billion to escape CUDA dependency, SpaceX/Cursor for $60 billion to shore up Grok…good luck), and AI labs receiving massive capital infusions that technically count as M&A when they involve equity.

OpenAI’s $122 billion Series D closed in Q1. Anthropic’s $65 billion Series H closed in Q2. Between those two transactions alone, roughly $187 billion flowed into frontier AI, an amount that rivals the entire tech M&A markets of some prior years. Some people say we are in an AI bubble, and if I could predict those things I probably wouldn’t tell you that in a free newsletter, but the better question is: are people prepared for what happens if it’s not a bubble?

Energy and Power: up 41% year-on-year.
The Energy and Power sector generated $146 billion in deal value in Q1 2026 alone, 8% of the entire market, driven almost entirely by the collision between the AI data centre buildout and an electrical grid that was not designed to power it.

Four companies — Alphabet, Amazon, Meta, and Microsoft — are expected to spend more than $700 billion in 2026 building AI infrastructure. That electricity has to come from somewhere, even if that somewhere is pulling power away from your home.

NextEra/Dominion at $66.8 billion and BlackRock-GIP/EQT/AES at $33.4 billion are the two clearest examples, but the theme runs deeper than two deals. Shell’s $22 billion ARC Resources acquisition is a gas supply deal for an LNG terminal positioned to serve Asian power demand. Every major energy deal this year traces back to the same underlying dynamic: AI compute needs power at a scale the existing infrastructure cannot deliver.

Paul Weiss partner Laura Turano told Bloomberg: “You can’t overstate how much better the regulatory environment is.” That is the other reason energy M&A ran hot in H1. Trump administration antitrust enforcement has been notably more permissive on strategic combinations than the prior four years, and the energy sector, particularly grid infrastructure, has been explicitly encouraged through executive order and NOAA permitting reform. I mean listen, the guy got FIFA to overturn a red card, surely he can get any deal over the line.

Industrials: up 57% year-on-year.
Industrials is less sexy these days than AI or Energy, but still consequential (or so every middle market PE firm tells me).

The driver is a similar grid and AI-adjacent infrastructure thesis applied further down the supply chain: KONE’s combination with TK Elevator, Safran’s €2.19 billion acquisition of Exail Technologies (autonomous naval systems), and a wave of mid-market industrials consolidation targeting companies with exposure to grid upgrades, EV supply chains, and defense manufacturing. This is where the institutional PE firms have been most active on a deal-count basis even if the individual transactions are smaller.

Pharmaceuticals and healthcare: Lilly injects life into the sector.
This is your reminder that I know nothing about healthcare which is why I typically don’t cover it. Let me know if you’d like to see more healthcare deals in future editions, and I can try to get up the curve.

Eli Lilly announced three acquisitions on the same morning in May — Curevo ($1.5 billion, shingles vaccine), LimmaTech ($780 million, gonorrhea/staph vaccines), and a third at $1.55 billion for Epstein-Barr virus platform.

AbbVie’s acquisition of Apogee Therapeutics at roughly $10.9 billion was the headline pharma deal of the quarter. Boston Scientific’s $14.5 billion acquisition of Penumbra is expected to close in H2.

From the little I know, the macro pattern across pharma M&A appears consistent with prior years but is accelerating rapidly. GLP-1 profits are funding acquisitions, patent cliff risk is forcing pipeline deals, and large strategics are paying premiums of 50-100% over recent share prices because they cannot afford to wait for assets to mature on their own timelines.

Biotech M&A tracking at 46 announced transactions through June 23 per BioBucks, led by Recordati/CVC at approximately $12.4 billion equity value.

Financial services: more deals, lower value. A two-speed market.
EY’s H1 financial services M&A report is one of the more interesting data points of the half. Banks, insurers and asset managers disclosed 1,137 deals globally, up 3% versus H1 2025, but total disclosed value fell from $191.3 billion to $134.5 billion, because the number of megadeals above $1 billion dropped from 37 in H1 2025 to 25 in H1 2026. Some niche boutique bank you’ve never heard of just dropped a pitch deck with it above GS by number of deals done in FIG despite earning ⅓ of the total fees of GS.

The volume increase is real: financial services is one of the few sectors where deal count actually rose in H1, driven by mid-market consolidation in insurance, RIA roll-ups, and accounting firm PE take-ins. The value decline reflects a specific composition shift: there was no Capital One/Discover-scale transaction in H1 2026. The KKR/Crowe deal at $3 billion is significant for what it signals about professional services consolidation, not for its contribution to the aggregate number.

Cross-border inbound M&A into the US from non-US financial services buyers rose from $4.8 billion in H1 2025 to $15.9 billion in H1 2026. The Santander/Webster Financial acquisition is the $12.2 billion elephant in the room when that comes up.

The Private Sector

The private markets picture in H1 2026 is genuinely contradictory until you understand the bifurcation. Global PE fundraising fell approximately 30% year-on-year to $287 billion. Global M&A hit a record. VC deal value set records. These things are all true simultaneously because private markets in 2026 are two distinct economies wearing the same label.

The large-platform economy is booming.
Blackstone, KKR, Apollo, Andreessen Horowitz, and General Catalyst are raising from sovereign wealth funds, pensions, and endowments at $5 billion minimum check sizes. The top five managers captured approximately 73% of all new LP capital in Q1.

They are deploying that capital into megadeals. PE-driven transactions totaled $583 billion in H1, up 54%. They are also deploying that capital into continuation vehicles that allow them to hold aging portfolio companies without forcing a traditional exit at depressed multiples.

Average deal size rose nearly 4x in H1 2026 versus H1 2025. That is not a signal of market health. It is a signal of extreme capital concentration.

The mid-market and emerging manager economy is contracting.
A year ago, it felt like everyone was opening up a PE fund named [Tree][Rock] focused on middle-market family owned businesses in the midwest with operational excellence.

Deal volume in H1 2026 declined 34% for PE broadly. There were fewer deals, but much bigger ones among the largest platforms. Mid-market GPs face valuation gaps between sellers anchored to 2021 marks and buyers priced to 2026 exit conditions.

The PwC Private Equity Midyear Outlook puts PE entry multiples in large deals at 11.2x EBITDA in H1 2026, with mid-market exits coming in at 9.8x. The spread between entry and exit multiples has compressed significantly, and that compression is the single biggest threat to returns in 2021-2024 vintage funds. Remember when IC said your entry and exit multiples should be the same? Yea, stop betting on multiple expansion.

The exit problem is real and the secondary market is trying to absorb it.
The exit backlog that has built since 2022 has not meaningfully cleared in H1 2026. IPO windows remain narrow outside the AI mega-listings. Sponsor-to-sponsor transactions face valuation scrutiny. LP distribution rates are low relative to historical averages.

In response, continuation vehicles and GP-led secondaries have become the primary liquidity mechanism and an important structural feature.

Total secondary market volume hit $233 billion in 2025, the largest year ever, and 2026 is tracking ahead of that pace. GP-led secondaries alone were $115-116 billion in 2025, up 53% year-on-year, with continuation vehicles representing 16% of all sponsor exit volume by Q3 2025. The discount-to-NAV on LP-initiated secondary sales has compressed from 15-20% in 2023 to 8-12% in 2026, as more capital chases the same secondary supply. High-quality single-asset continuation vehicles are clearing at or near par.

The VC picture has the same concentration problem as PE but even more extreme. Q1 2026 global VC deal value hit $330.9 billion, which is a record by all accounts. But OpenAI’s $122 billion Series D alone represented 41% of the quarter’s total global VC investment. Remove OpenAI and it was an unremarkable quarter (thanks, Sam!).

In H1, OpenAI and Anthropic together attracted more than 40% of all venture funding globally. The broader ecosystem is showing signs of life. 32 companies went public at values above $1 billion in Q2, led by SpaceX, Cerebras, and Quantinuum, but the headline numbers are being carried by two companies with historical precedent-setting fundraises.

H2 Predictions

Since I’m still riding my high from the NFLX x WBD prediction (even if that turned out to be a miss in the end) and from calling the OpenAI filing to the day, I am going to put out some trends I am watching for in H2. Let’s see if the Oracle can be right again.

1. The IPO window.
   SpaceX listed June 12. Anthropic filed in early July. OpenAI targets September. If all three price and trade well from listing, they become the signal that unlocks a broader IPO market for companies that have been waiting since 2022. The PE exit backlog directly depends on this: if the window opens properly, expect a wave of PE-backed company prospectuses in Q3 and Q4. If it doesn’t, and SpaceX’s post-IPO decline to below its $150 opening price is a cautionary data point, the secondary market will absorb more of the backlog and GPs will face another difficult conversation with LPs about distribution timelines.

2. European regulatory reform.
   The EU’s 98-page draft Merger Guidelines closed public comment on June 26. An economic study on the dynamic effects of mergers is expected in September. If the new guidelines streamline approval timelines, European cross-border M&A (which had its best H1 start since 2018) accelerates in H2. If the guidelines ultimately add complexity rather than reduce it, the deal activity that’s been building in EMEA will hit a regulatory wall in Q4. This will matter most for the UK-listed companies that have been acquisition targets all year. Remember the adage: America innovates, China replicates, and Europe regulates.

3. The PE liquidity reckoning.
   The continuation vehicle market is functioning as a pressure valve, but it is not a permanent solution. The firms with the cleanest exit track record — demonstrated distributions to paid-in capital, not paper marks — are raising quickly. Everyone else is facing longer fundraising timelines, reduced targets, and LP investment committees that have run out of patience with the “it’s still early days” framing. The bifurcation that characterized H1 - mega-platforms winning, everyone else grinding - will intensify in H2 if the IPO market doesn’t open broad enough to clear the backlog meaningfully. Once again, check in on your PE friends.

Regardless, this has been a stellar H1 for deals. We have seen incredible success stories and the largest IPO in history drop all in the start of the year. I hope H2 will be as successful as H1, even if that means I have my work cut out for me in December when I write my annual Buysiders awards.

_{NEWS ROUNDUP}

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