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Bass, Berry & Sims attorneys David Harper and Brian Sims authored an article for Industry Today examining the key issues shaping industrial and manufacturing mergers and acquisitions activity in 2026. The article highlights how buyers, sellers, and investors can navigate a market characterized by continued deal activity, evolving technology risks, tariff uncertainty, and changing financing dynamics.
In the article, David and Brian identify three areas that industrial dealmakers should prioritize: artificial intelligence (AI) and automation diligence, tariff and customs exposure, and financing flexibility. They note that while industrial M&A activity remains strong, market participants are focusing more closely on value preservation, margin protection, and execution certainty throughout the transaction process.
The authors explain that AI has become a core diligence issue in industrial transactions. Buyers are increasingly evaluating how target companies utilize AI, while also assessing intellectual property ownership, data security risks, vendor dependencies, and controls designed to mitigate inaccurate or unreliable AI outputs. According to the article, these technology considerations are becoming central to successful post-transaction integration and long-term value creation.
David and Brian also discuss the growing impact of tariffs and customs costs on transaction planning. As manufacturers continue to navigate supply chain restructuring and reshoring initiatives, the authors encourage businesses to closely examine supplier and customer contracts, assess cost pass-through rights, and evaluate termination provisions that could affect profitability and deal value.
The article further explores how the expansion of private credit has created additional financing alternatives for industrial companies pursuing acquisitions and growth initiatives. While these financing solutions may offer greater flexibility than traditional lending structures, the authors note that companies should carefully evaluate covenant packages, liquidity considerations, pricing terms, and downside risks before selecting a financing strategy.
As David and Brian conclude, “Addressing AI risk, tariff exposure and financing flexibility at the outset can help parties better assess valuation, allocate risk and preserve execution certainty.” By proactively evaluating these issues, dealmakers can better position themselves for successful transactions in an increasingly complex market environment.
The full article, “Industrial M&A in 2026: What Dealmakers Should Watch,” was published by Industry Today on September 2 and is available online.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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