Monomoy’s 2H 2025 Business Development Update: A Market in Transition

Middle-market M&A in 2025 didn’t freeze — it shifted. Deal flow slowed, but more importantly, it moved in specific directions.

Our 2H 2025 Business Development Update, compiled from Beacon, our proprietary sourcing engine, tracks thousands of middle-market processes and shows a market becoming more selective and increasingly driven by non-traditional deal sources.

WHAT THE DATA SHOWS

Deal composition changed significantly. Sponsor-to-sponsor activity declined while bankruptcy-driven and public company opportunities rose. Transaction size bifurcated: some EBITDA bands hit multi-year highs for deal flow while others saw elevated no-trade rates.

Sector performance diverged. Several industries reached four-year highs in deal flow. Others hit four-year lows. Execution remained challenging, with broken auction rates approaching historical highs.

Our forward-looking Deal Compass reveals where pipeline activity is building and where it’s contracting heading into 2026.

PERSPECTIVES: WHAT STOOD OUT IN THE DATA

Renn Iaboni, Monomoy Managing Director and Head of Origination, and Drew Davis, Investment Team Director, share what stood out most in the data and what it signals for 2026.