Distribution M&A Pulse – Q1 2026

DISTRIBUTION M&A MARKET DYNAMICS

• U.S. distribution M&A activity remained relatively stable in Q1-26, with 78 announced transactions compared to 82 in the prior-year period, reflecting a resilient domestic backdrop despite a somewhat uneven macroeconomic environment. Continued pricing power across the channel, as evidenced by rising core wholesale prices and sustained margin expansion among distributors, has supported earnings durability and underpinned buyer confidence in U.S. assets.
• In contrast, global distribution M&A activity declined 12.4% in Q1-26 compared to Q1-25, highlighting greater pressure in international markets. The slowdown primarily reflects elevated supplier uncertainty, including disruption following the closure of the Strait of Hormuz, alongside a dynamic tariff environment that has created additional volatility in cross-border pricing and sourcing strategies. These factors have introduced instability across key trade corridors and have prompted some undifferentiated sellers to delay sale processes until supply chains, tariff exposure, and input cost visibility more fully stabilize.
• Prospective acquirers are placing increased focus on “aftermarket” diligence as buyers prioritize the quality and durability of service-driven revenue streams. Assets that demonstrate a well-developed aftermarket platform, including strong replacement parts capture rates, embedded service relationships, and recurring maintenance revenue, tend to exhibit higher margins and less cyclicality than others. As a result, companies that can clearly articulate and substantiate their aftermarket economics are increasingly commanding premium valuations.