Top story: 2026: A Momentum Year — Buy‑then‑Grow meets Succession

Cautious optimism sets the tone for the new year. At BayBG’s annual kick‑off, Dr. Jürgen Michels, Chief Economist at BayernLB, outlined a view that blends resilience with recovery—the ideal mix for strategic M&A to regain speed. At the same time, the founder generation of the 1990s/2000s is entering the succession phase. For owner‑managed IT and software companies, this creates a rare alignment: market window and generational change coincide. In that sense, 2026 is more than a new year—it’s a momentum year. Our theme: Buy‑then‑Grow.

Why now: the 2026 setup
The signals are clear. After a year of selection, deal values are rising even as volumes are lower—quality over quantity. Many mid‑market participants expect increases in both volume and value in 2026. Technology remains the hot spot in German M&A; a substantial share of activity is in IT and software. At the same time, a succession wave is building: hundreds of thousands of transitions are due, with many tech‑driven mid‑sizers boasting solid customer bases and predictable cash flows. This combination—improving macro, succession need, and a tech focus—favors Buy‑then‑Grow strategies.

Buy‑then‑Grow: the logic behind the label
“Buy‑then‑Grow isn’t about funding growth for its own sake; it’s about acquiring capabilities, time, and market position,” says Florian Liepert, CIO and Partner at atares. “Instead of spending 24 months building a new offering—say, a cybersecurity team—growing IT companies acquire an established 15‑person specialist unit with proven processes and reliable KPIs.” The effect: immediate market access, a predictable pipeline, and a shorter time‑to‑impact. Studies confirm the trend: fewer transactions, but larger, more strategic ones—often with tech and AI angles. In short, the logic is shifting from headcount scaling to capability acquisition.

Deal culture: from “hoodie‑meets‑tie” to integration readiness
The biggest hurdle isn’t technology—it’s cultural onboarding. As Kai Hesselmann (DEALCIRCLE) puts it: the theoretical succession gap becomes an innovation bridge when an agile scale‑up (innovation) meets an established mid‑market player (market access, cash flow). For that bridge to hold, you need respect for the life’s work on one side and openness to future technology on the other. Our experience: “Succession pressure opens the door; trust closes the deal,” says Pascal Kopp, Head of Business Development at atares. His view: “A handshake beats a KPI pitch—provided governance, roles, and expectations are clear from day one.”

The AI lever: from thesis to operations
In 2025, AI moved from hype to hands‑on. Most visible: due diligence and post‑merger integration (PMI). Automated KPI pipelines, pattern recognition in customer and support data, and AI‑assisted synergy tracking are speeding up integration phases. Surveys indicate a majority view AI as an M&A accelerator; at the same time, data quality is the biggest hurdle. That’s an opportunity for data‑strong IT companies: those who master governance, reporting, and data rooms tell a more credible story—and shorten the path from signing to realized value.

A 90‑day playbook: what to do now
Buyers (scale‑ups, strategics, private equity) should sharpen their investment thesis around concrete capabilities: Which ones—security, AI/ML, ERP/SAP, managed services, embedded software—accelerate your roadmap? Then: criteria‑based screening, early culture fit, deal structures with earn‑out/retention elements, and a PMI plan as a 30‑60‑90‑day roadmap: go‑to‑market harmonization, cross‑sell playbooks, unified pricing, prioritized integrations (SSO, APIs), plus AI‑enabled synergy tracking.

Sellers should raise their exit readiness by upgrading both data room and narrative: cohort analyses (MRR/ARR), NRR/GRR, pipeline health, customer segments, product and tech roadmap with a clear CapEx/OpEx path, and HR plans for key people. The target is a premium exit option: multiple qualified buyers, a well‑orchestrated process, and the best transition. The deciding factor is the capability narrative: less size for size’s sake, more on how your company strengthens the buyer’s portfolio measurably from day one.

Integration as value lever: where value is created after signing
Value is realized post‑closing. In IT and software, the strongest levers sit in five areas:

• Revenue: cross‑sell bundles, consistent pricing, activate partner ecosystems.
• Product: de‑duplicate roadmaps, prioritize platform integrations, standardize SSO and APIs.
• Operations: consolidate infrastructure, harmonize sourcing, automate the back office.
• People: retention packages and clear roles from day one; culture as practice, not pageantry.
• AI in PMI: automated KPI pipelines, intelligent signal systems (tickets, NPS), real‑time synergy dashboards.

atares in practice: a digital manufactory, not PowerPoint
We don’t just advocate these principles—we operate on them. As a digital manufactory, we combine repeatable playbooks with tailored mandate execution. Our proprietary tool stack and agents (e.g., for sourcing, proposal logic, outreach, and lead prioritization) accelerate routine work and free up time for what AI can’t do: strategic judgment, negotiation, stakeholder management. In recent work (including FLEXICODE to EOS), the stack and AI‑enabled workflows measurably sped up the process—from first contact to signing in three months. Technology in the background, people front and center: that’s how we create value.

Looking ahead: decisions with leverage
2026 will be a year of strategic choices. For buyers: buy future‑readiness when building would be too slow. For sellers: treat succession as a partnership—with a counterparty that can scale your life’s work. Or, as Jan Pörschmann puts it: “Your next scaling boost may be sitting on someone else’s balance sheet.” Jan Pörschmann is Chairman of the German M&A Association (Bundesverband M&A) and Managing Partner at atares.

Conclusion
The 2026 momentum rests on three pillars: a recovering deal landscape, a mid‑market succession wave, and a technology agenda that makes AI operational reality. Those who think structurally, execute systematically, and take cultural integration seriously will turn the succession gap into an innovation bridge—and make Buy‑then‑Grow the growth strategy of their generation.