Private equity firms Audax, Baird, Copley and MSouth are actively pursuing acquisitions in business services companies, according to sources at the ACG DealMax 2026 conference. The firms are targeting consolidated service providers amid shifting market dynamics and evolving client demands across multiple sectors.

Capstone Partners highlighted ongoing challenges in the industrials deal market through their annual Middle Market Deal Activity and Outlook report presented at the conference. Despite macroeconomic headwinds, select opportunities in specialized business services continue to attract sponsor attention, particularly in fragmented verticals with strong recurring revenue models.

Market participants note that while broader industrials M&A faces valuation pressures and financing constraints, business services deals maintain relative resilience. The convergence of strategic buyers and financial sponsors suggests continued activity in the sector, albeit at adjusted multiples compared to peak market periods.

These developments reflect private equity's ongoing rotation toward defensive assets with predictable cash flows, as macroeconomic uncertainty extends into 2026.