UMB’s Vincent Burke recently sat down with AZBig Magazine‡ to discuss the 2026 M&A landscape in Arizona. His key takeaways are valuable across any market, addressing what businesses can do to accommodate shifts in dealmaking.

The middle market may feel like it’s speeding up, and “bigger” and “faster” are the only qualifiers that matter. But from a bank’s perspective, that simply isn’t the case. Bigger and faster aren’t the only way; disciplined execution, a calculated strategy and a well-prepared business are all critical.

At UMB, we sit at the intersection of these moving parts. Here is what we are seeing on the ground, and how it impacts the future of dealmaking in Arizona and beyond.

Market conditions and trends

All regulated financial institutions play by a similar regulatory playbook. Regulators monitor our portfolios closely, requiring us to follow specific guidelines and act as responsible stewards of customer deposits.

This diligent oversight naturally mutes reckless growth. As regulators review our portfolios, they may provide certain areas of focus, looking to help avoid potential issues and eliminate hurdles before they become systemic problems.

Of course, we all feel the industry shifting in other ways, like with the growing presence of private equity and private credit firms. Historically, UMB didn’t target many sponsored deals with private equity companies, but, starting about 10 years ago, we supplemented lending policy to provide guidance on opportunities in this space. Applied correctly, these guidelines have led to growth for UMB, businesses and private equity.

As more banks pursued financing with private equity sponsored clients, terms have started to stretch the comfort zone of policies, while higher rates impact values for some acquisitions. The desirable private equity partners are sophisticated in their analysis to drive return on investment, even in a higher-cost-of-capital environment. Banks will likely need to revisit the underwriting guidelines to manage risk adequately.

Private equity funds are still sitting on an immense amount of “dry powder” (available cash) which will drive deal flow that banks will need to thoroughly analyze. Furthermore, if interest rates tick down by a quarter or half point, it releases a massive wave of funding, opening new windows for strategic growth.

The new buyer profile

In 2026, we see varying buyer needs across the board. For some, it’s agnostic of industry, while others search in specific industries or verticals. We have also seen a focus on founder-based companies without a strong transition plan. However, what all buyers have in common is the search for value.

With value in mind, we are also seeing traction in add-on acquisitions or carve-outs in the space. For companies looking to grow, leveraging an add-on acquisition can help identify synergies and gaps between businesses, remove competition from the market and unlock opportunity and scale.

For UMB, we always have and always will focus on the meat and potatoes of a deal. After getting comfortable with the leadership of the company and buyer, we evaluate collateral, operating margin, leverage and cash flow. Then, we look at the timeframe for leverage to burn down to an acceptable level and develop a structure we are comfortable with that won’t hurt profit margin and income. It’s a balance of the fundamentals, and it’s how we stay steady in a fast-paced market where speed to close can be a differentiator.

UMB’s competitive advantage lies in our model: we go to market with a detailed expression of interest in a tight timeframe. This gives dealmakers the execution confidence they need. Private equity firms have investors to answer to, so if they miss a window, they lose backing. Our job is to execute flawlessly on each opportunity in front of us.

Insights for sellers

We are currently experiencing an unprecedented transition boom not just in Arizona, but across the nation. Many local business owners who started their companies decades ago are now ready to step back. Amidst a thriving local economy, these founders are asking themselves if they really are ready to walk away and what legacy they want to leave behind.

As part of this demographic trend, we are seeing a major surge in employee stock ownership plans (ESOPs), particularly among contractors where specialized consultants have successfully proven the model’s value.

Whether your exit path is an ESOP, a strategic vertical buyout or private equity, readiness is everything. The deals that successfully cross the finish line are those built on a sound foundation: strong leadership, a clear understanding of the market and a flawless financial house. Conversely, the deals that fall apart are almost always the ones that rushed to market too early without proper preparation.

If you want to capture the highest possible valuation, you must start planning three to five years in advance.

  • 3 – 5 years away: Audit financials, fix reporting gaps and secure a reputable CPA firm.
  • 1 – 2 years away: Maximize operational efficiencies, stabilize margins and solidify leadership.
  • Year of execution: Go to market with a clean quality of earnings (QofE) report.

Ultimately, the market hasn’t necessarily sped up, but it has matured. Investors, banks and buyers have all become better and sharper at what they do. By ensuring your financial house is in order today, you ensure your business is positioned on its best footing when it’s time to take that next step.

If M&A is part of your growth plan, we welcome the opportunity to provide our expertise throughout the process. Visit umb.com for more information.

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