Private equity firms are sitting on record levels of unspent capital, creating unprecedented opportunity for business owners considering an exit. With improving market conditions, understanding which sectors are private equity acquisition targets for 2026 could determine whether your business is positioned for a lucrative exit.
After analyzing recent reports from PwC, McKinsey, and EY, clear patterns emerge about where private equity investment will flow in 2026. More importantly, understanding what makes businesses in these sectors attractive can help you assess your own company’s acquisition readiness.
The Top Five Private Equity Acquisition Targets for 2026
1. Healthcare and Medical Services
Healthcare continues to dominate private equity interest, with particular focus on scalable platforms and specialty services. The sector has seen sustained consolidation activity, particularly in add-on acquisitions as PE firms build larger healthcare platforms.
Medical aesthetics businesses, particularly medspas, remain highly sought after due to their recurring revenue models and strong cash flow characteristics. Healthcare platforms that can integrate multiple service lines or locations attract premium valuations as PE firms pursue roll-up strategies in this fragmented market.
PwC’s 2025 midyear outlook identifies healthcare platforms as one of the sectors offering scalable growth with limited capital intensity, a key characteristic PE firms prioritize in the current interest rate environment.
2. Technology-Enabled Business Services
Enterprise software and tech-enabled services continue to attract significant PE investment. Technology consistently leads deal activity across multiple sectors as PE firms seek businesses with strong growth potential and recurring revenue characteristics.
Private equity firms particularly favor SaaS businesses with recurring revenue models, but the definition has expanded beyond pure software companies. Any business that leverages technology to deliver services more efficiently falls into this category, from logistics platforms to professional services firms with proprietary technology.
The key differentiator is whether technology creates a competitive moat and enables scalability without proportional increases in costs.
3. Professional Services
CPA firms, wealth management companies, and consulting businesses have become major private equity acquisition targets. Add-on acquisitions have driven significant deal activity in the highly fragmented professional services sector, with expectations for continued growth in 2025 and beyond.
The recent sale of Citrin Cooperman to Blackstone, valued at approximately $2 billion, marked the first significant exit in the CPA sector and validated the underlying investment thesis for professional services acquisitions.
PE firms see professional services as ideal for consolidation strategies, particularly when businesses demonstrate strong client relationships, recurring revenue, and potential for cross-selling services across a growing platform.
4. Consumer Residential Services
HVAC, plumbing, and other home services businesses represent one of the newest sectors seeing aggressive PE roll-up activity. These businesses benefit from recurring maintenance contracts, essential service demand, and highly fragmented markets ripe for consolidation.
Smart building technology and IoT integration represent additional drivers of PE interest in this sector. Companies that embrace technology integration alongside traditional service delivery are particularly attractive.
The consumer residential services model appeals to PE firms because it combines essential demand with predictable revenue streams and clear geographic expansion opportunities through add-on acquisitions.
5. Industrial Services and Manufacturing
Industrial services, particularly those with technology integration components, continue attracting PE attention. The focus has shifted toward companies that demonstrate efficiency through technology adoption rather than traditional manufacturing reliant on heavy capital expenditures.
PE firms seek industrial businesses with specialized capabilities, strong customer relationships, and opportunities to improve operations through technology implementation and best practice deployment.
What Makes a Business an Attractive Private Equity Acquisition Target
Regardless of sector, PE firms consistently evaluate businesses against specific criteria that determine acquisition attractiveness and valuation multiples.
Scalable Growth with Limited Capital Intensity
According to PwC’s 2025 research, dealmakers favor sectors offering scalable growth without requiring proportional capital investment. Asset-light business models that can expand revenue without significant equipment, inventory, or infrastructure investments command premium valuations.
Recurring Revenue Models
Businesses with predictable, recurring revenue streams consistently attract higher valuations. Whether through subscription services, maintenance contracts, or retainer agreements, recurring revenue reduces risk and improves cash flow predictability.
Strong Cash Flow Generation
Free cash flow matters more than ever in the current environment. PwC notes that with higher interest rates raising the bar for returns, PE firms focus intensely on businesses generating strong, consistent cash flow that can support acquisition debt and fund growth initiatives.
Roll-Up Potential in Fragmented Markets
PE firms don’t just evaluate your business in isolation. They assess whether your market contains other acquisition targets that could be rolled into a larger platform. If your industry is highly fragmented with many independent operators, your business becomes more valuable as a potential platform acquisition.
Technology Integration Opportunities
Research across the industry highlights technology integration as a key driver of PE interest across sectors. This doesn’t mean your business needs to be a technology company, but demonstrating how technology could enhance operations, improve margins, or enable scaling increases attractiveness to sophisticated buyers.
The Strategic Shift in Private Equity Acquisitions
PwC’s research reveals an important shift: private equity firms are moving from pure financial engineering to operational value creation. Higher interest rates have eliminated the ability to achieve strong returns through leverage alone, forcing PE firms to focus on businesses where they can drive genuine operational improvements and revenue growth.
This shift actually benefits quality businesses. PE firms now seek companies with clear operational improvement opportunities, proven management teams capable of executing growth plans, and market positions that support expansion.
Positioning Your Business for Private Equity Acquisition
If your business operates in one of these target sectors and demonstrates the characteristics PE firms seek, you may be closer to an attractive exit than you realize. However, positioning your business for maximum valuation requires strategic preparation.
Start by honestly assessing your business against PE criteria. Do you have recurring revenue? Can you articulate clear growth opportunities? Is your management team capable of operating independently? Are your financials clean and transparent?
The businesses achieving premium valuations are those that address these questions proactively, typically beginning preparation 12-18 months before going to market.
Take Action
The private equity acquisition market for 2026 is positioned for strength. Buyers have capital, market conditions are improving, and quality businesses in target sectors are commanding strong valuations. If you are interested in selling, but don’t feel confident that your business is 100% ready, don’t stress! We can help you get prepared to put you in the best position to sell at a higher price.
Find out if your business is one of the private equity acquisition targets for 2026. Contact TREP Advisors for a confidential assessment of your business and the opportunities available in today’s market.
Sources:
- PwC– US Private Equity Deals Outlook
https://www.pwc.com/us/en/industries/financial-services/library/private-equity-deals-outlook.html
- McKinsey & Company – Global Private Markets Report 2025 https://www.mckinsey.com/industries/private-capital/our-insights/global-private-markets-report
- EY-Parthenon – October 2025 Deal Barometer https://www.ey.com/en_us/newsroom/2025/10/dealmakers-shift-from-recovery-to-resilient-growth-driven-by-strategic-ai-driven-transformation
- EY – Private Equity Pulse Q3 2025 https://www.ey.com/en_us/insights/private-equity/pulse
4. EY – 2025 Private Equity Trends
https://www.ey.com/en_us/insights/private-equity/2025-pe-trends