Market Saturation is Here – Will You Ride the Wave or Get Swept Away?

I’ve gotten many questions about how the predicted M&A supercycle has tracked and where we are in the market saturation continuum, so I thought I would share an update as a follow-up to last year’s article “Market Saturation Is Coming.”

The M&A landscape is no longer waiting for a supercycle—it’s entering one right now. After two years of bottlenecks, dry powder pressure, and strategic hesitation, we are finally witnessing the turn. A tidal wave of capital is in motion, and the floodgates are starting to open. The market is shifting from scarcity to saturation, and for middle-market owners, that means the window of peak leverage is closing fast.

Through the first half of 2025, we’ve seen a sudden uptick in deal values and investor urgency. A once-supply-starved environment has become intensely competitive, but that competition is quickly moving from the buy-side to the sell-side. Private equity is finally exiting. Venture capital is finally offloading. And an inventory surge is imminent.

The Current Landscape of M&A

Midway through 2025, we’re seeing a classic inflection point. According to Reuters, global M&A deal value hit $2.14 trillion in the first half of the year—up 26% from the same period in 2024—even though total deal volume remains below long-term averages. That tells you everything: there’s an oversupply of capital, a limited number of quality sellers, and buyers willing to move fast and pay up when the right deal surfaces.

But the pace is quickening. Large deals are back in fashion. Strategic acquirers are leaning in again. And middle-market sellers who enter now are still benefiting from the “scarcity premium”—but that advantage has a shelf life.

The Surge in Available Capital

Private capital hasn’t just remained strong—it’s reached a pressure point. In June, WSJ reported that private equity dry powder is nearing $1 trillion, with much of it locked in aging funds struggling to deploy. Investors are restless. Ticking clocks and impatient LPs are squeezing fund managers. The result? Deals are happening quickly and in ways we haven’t seen since before the pandemic.

Do You Know What Buyers Are Looking For?

At the same time, PitchBook reports that PE exit value nearly doubled in Q1, reaching $302 billion. Global megadeals—such as Worldpay’s $24 billion sale—are breaking the stalemate and pushing portfolio companies into the market. Funds that were holding out are now repositioning, recapitalizing, and racing to lock in returns before the next macro reset.

This urgency has filtered down into the middle market. If you’re in the market now, you’re getting looks from buyers who were on the sidelines last year. Your timing is good, but the clock is ticking.

The Role of Private Equity

Private equity’s role in the current supercycle is hard to overstate. They’ve spent 18 months
hoarding capital, delaying exits, and waiting for the market to come back to them. It hasn’t. So they’re pivoting.

As PwC notes, the 2025 playbook is all about offense: exiting more, investing faster, and using continuation vehicles and secondary markets to create liquidity. However, even with that innovation, the bottleneck remains real, especially in the lower middle market, where inventory remains tight, at least for now.

That’s changing rapidly. The combination of falling interest rates, seller confidence, and pent-up demand is forcing PE’s hand. They’re not just buying—they’re selling. And once the portfolios hit the market in full force, the balance will tip.

The Venture Capital Ecosystem

Venture capital is also being pulled into the current. Despite sluggish IPO markets and below-expectation returns, VC funds are under similar pressure to exit. According to the Times of India, late-stage VC investments rebounded in June 2025, driven by anticipated IPOs from unicorns like Meesho, Pine Labs, and Zepto.

VC managers aren’t waiting for public markets anymore. They’re taking advantage of PE dry powder to recapitalize directly. And that means more companies—especially tech-driven growth companies—will flood the secondary market through the back half of the year.

This wave will hit the market fast and hard, with strategic acquirers and sponsor-backed platforms alike caught in the undertow.

Impending Market Saturation

All signs point to a late-2025 saturation point. As both PE and VC firms offload assets, the flood of opportunities will reshape the dynamic. The buyers who were once fighting over scraps will suddenly have their pick of deals.

Valuations will “normalize.” Terms will tighten. And leverage will shift.

For sellers, this means a very narrow window of maximum negotiation power, likely as long as EOY 2025 and at least through the end of Q3. After that, expect increased diligence, more earnouts, and tighter spreads between asking prices and offers.

The supercycle doesn’t eliminate M&A opportunities. But it does shift where and how that value is captured. Early movers benefit most.

Conclusion

If you’re a middle-market company considering an exit, there has never been a more urgent time to act. The window opened in 2023. It stayed open through 2024. And now, midway through 2025, it’s beginning to close.

Current sellers still benefit from scarcity. They’re commanding strong valuations, streamlined deal terms, and competitive tension between cash-rich buyers. But that won’t last. By early 2026, the market will be flooded with sponsor-backed deals and recap exits. Sophisticated buyers will dictate terms. And you’ll be negotiating in a crowded field.

This is your wake-up call to action: If you’re exit-ready, go now. If you’re not, go now and consider bringing on a strategic growth partner asap before competition spikes. If you wait for the “next cycle,” you may find yourself stuck—surrounded by sellers, starved for leverage, and navigating a buyer’s market where value is capped.

Don’t miss the wave. Ride it while the tide is high.

Author: Jared Hardin, Managing Director, Benchmark International