Acquisitions in the distribution sector declined toward the end of last year, but 2026 is poised for stronger deal activity, according to the latest quarterly analysis from investment bank PMCF.
PMCF’s “Distribution M&A Pulse” noted that 56 distribution M&A deals were completed in the U.S. in the fourth quarter of 2025, down from 88 deals in the same quarter of the previous year. Globally, deals were also down year-over-year in the quarter, sliding from 205 down to 131, and transaction volumes were down on a full-year basis, as well.
The decline, however, reflected a higher level of discipline from buyers rather than diminished interest in the market, the report found, and analysts wrote that a number of factors pointed to a more active M&A climate in 2026, including “structural tailwinds” such as “customer outsourcing, product complexity and service-driven supply chains.” Analysts added that increased economic visibility and stability led to more large-scale deals in the latter half of 2025, and that normalizing inventory levels and increased investments in advanced technologies are “reinforcing the strategic case for continued industry consolidation.”
“Collectively, these dynamics point to a structurally healthier M&A environment entering 2026 with activity increasingly driven by scale, durability and strategic urgency rather than purely cyclical recovery,” analysts wrote.
The report also suggested that a pair of large transactions in the distribution sector late last year — Berkshire Partners’ addition of United Flow Technologies and the merger of DNOW and MRC Global — could “ignite a new phase of deal-making and consolidation” as those companies’ rivals seek to keep pace.
Other trends outlined in the latest PMCF report included buyers seeking to “localize” operations amid rising tariffs and geopolitical tensions, an interest from international acquirers in the U.S. middle market, and growing closing timelines as buyers invest in comprehensive diligence processes.
