Axial has released its analysis of top of the funnel activity on its deal platform for the lower-middle-market for Q4 2025.*
Total deals for Q4 2025 on the Axial platform were up 11.7% over Q4 2024, indicating a highly active lower-middle market with 2,854 deals marketed. The year was a record-breaking year with deals increasing 17.1%.
“The Axial Q4 report suggests that owners remain motivated to transact even as market dynamics evolve. At BayState Business Brokers, we are also experiencing strong new listing activity as many owners of profitable legacy companies look to exit,” shared Principal Sarah Grossman.
Sector Highlights
Deal activity increased for Q4 year over year for many industries as listed below:
- Healthcare led industry growth by a wide margin, up 40.5%
- Business Services up 17.7%
- Food & Hospitality up 13.8%
- Industrials up over 10% followed by Technology up more than 8%
- Transportation grew modestly, up just over 2%
Consumer Goods was the only major industry category to report a decline quarter over quarter, down more than 4%.
Pursuit Rates
The Q4 2025 report showed that “pursuit rates” — which measure buyer engagement at an early stage of the deal funnel — indicated that Industrials demonstrated a solid alignment between supply and buyer demand, ranking first in both deal volume and pursuit interest.
In contrast, Food & Hospitality and Consumer Goods had elevated listing counts but comparatively lower buyer pursuit rates, suggesting supply outpaced early interest.
While the Technology sector had fewer listings in the quarter, there was strong buyer interest, reflecting selective buyer focus on fewer opportunities.
Conclusion
Overall, the Q4 2025 snapshot depicts a market where sellers are increasingly electing to test the market, especially in resilient sectors, and buyers are selective, concentrating on industries perceived as durable, defensible and yielding predictable cash flows.
Sarah adds, “We are seeing the trends as reported from Axial’s Q4 2025 continuing into 2026 as the year starts off with solid seller and buyer activity and interest.”
If you are considering selling or buying a business, we welcome the opportunity to discuss your situation and goals to help you make an informed decision. Call us at 617-562-5700 or Contact us.
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*BayState Business Brokers has a partnership with Axial, a leading deal organization platform for the lower-middle-market M&A where our confidential business listings reach targeted buyers including private equity, strategic buyers and family offices. The source of this data is Axial’s Q4 2025 report made available to partners and members.
