Resilience over hype: what buyers are really looking for in 2026

The German M&A market is entering a new phase in 2026. After years in which narratives centred on technology and growth dominated much of the valuation debate, the focus is shifting towards a more fundamental question: how genuinely resilient is a business model? What investors are seeking are companies with robust market positions, strong cash flow quality and the ability to generate reliable value even in volatile market conditions.

This shift is not a counterpoint to technology-driven business models, but rather a reflection of a changed valuation logic. Professional investors are now scrutinising more carefully how exposed a company is to cyclical swings, supply chain disruption or technological change — and how firmly pricing power is embedded in the business model. In particular, companies with stable cash flows and an AI-resistant business model are coming into focus. These are companies whose products or services cannot be replicated or displaced by artificial intelligence.

This also explains why industrial equipment manufacturers and other mid-market business models are attracting renewed attention. Many of these segments combine long-standing customer relationships, high technical barriers to entry and a clearly demonstrable value contribution. From an investor's perspective, that combination translates into precisely the kind of resilience that is especially attractive in a selective market environment.

It is important, however, not to read this as a straightforward "industry over software" thesis. Technology-enabled business models can also be highly resilient — particularly where they are deeply embedded in customer processes and manage, for example, productivity-critical or safety-critical workflows. What ultimately matters is not a company's sector label, but rather how robust its earnings power, market position and capacity for transformation are when considered together.

For private equity investors, this further shifts the focus towards the quality of value creation. Anyone seeking to identify attractive investments in 2026 must distinguish more carefully between short-term momentum and sustainable substance — and between fashionable narratives and genuine operational relevance to customers.