Baird Global Industrial Group 2026 Mid-Year Update
From Tariff Uncertainty to Full Speed Ahead
The Industrial market has had one of its strongest starts to a year in recent memory. After tariff-driven uncertainty weighed on deal activity through the first half of 2025, momentum returned in the second half of the year and has accelerated sharply into 2026. Buyer engagement, competitive tension in our processes and the pace of new mandates are all as strong as we have seen in years.
For H1 2026, our Global Industrial Group has guided clients through 53 successful advisory and financing transactions, representing over $39 billion in transaction value. The strength of our balanced platform continues to be demonstrated across origination, execution and sector depth.
- 53 signed or closed advisory and financing transactions
- $26B+ in total M&A transaction value
- $13B+ capital raised
- 100+ dedicated industry bankers
- 20+ sector verticals covered
- 48% of M&A engagements involved a non-U.S. party
View Selected Recent Transactions
View All Industrial Transactions
Key Themes for H2 2026: Buyer Landscape & Global Participation
Momentum in the Industrial market built steadily through the first half of the year, supported by robust strategic buyer demand and a deep, well-capitalized sponsor community. Buyers are competing aggressively for high-quality assets, and the conditions driving that activity look durable heading into the second half of the year.
The sector is well positioned for continued activity in the second half of the year, supported by several durable drivers:
Sustained strategic buyer demand
Open IPO window for a broad set of issuers
Robust pipeline of sponsor-backed exits
Continued investment in Infrastructure, data centers, AI-driven ecosystems, energy transition and resilience
Global Buyer Demand and Cross-Border Activity
Strategic buyers are leading our sell-side momentum. Supported by healthy corporate balance sheets and continued consolidation, strategic acquirers now represent >60% of our sell-side buyers year-to-date in 2026, competing aggressively for scaled, high-quality industrial assets.
International participation is an increasingly important part of that strategic demand. In recent processes, nearly half of buyers have come from outside the U.S., with especially strong engagement from European acquirers. This cross-border interest supports competitive deal dynamics and helps sustain valuation levels across a range of industrial subsectors.
Manufacturing Back in Expansion
A clear signal behind the acceleration in Industrial deal activity is the return of growth in U.S. manufacturing. After two brief expansionary months across all of 2024 and 2025, the ISM Manufacturing PMI has held above the 50-point expansion threshold every month from January through June 2026, reaching its highest level since 2022. For Industrial M&A, that sustained momentum means investors are deploying capital with greater conviction when the underlying sector is growing, not contracting.
A Relative Safe Haven from AI Disruption
The rapid rise of AI and the pressure it is placing on select business models has not carried the same threat to traditional Industrial businesses. Where other sectors face hard questions about how AI reshapes their economics, most Industrial companies are adopting AI as a productivity tool rather than confronting it as an existential risk. That relative insulation is one more reason investors increasingly view Industrials as a safer, more predictable place to deploy capital, reinforcing the demand we are seeing.
Sponsor Behavior Trends
Sponsors remain highly active and are competing hard for high-quality, stable assets. With substantial dry powder to deploy and a growing backlog of portfolio companies to exit, private equity is a powerful source of both demand and supply, adding to the depth and competitiveness of current processes.
Additional Industrial Sector Insights
Baird continues to lead across high-growth industrial subsectors, including Safety & Security, Aerospace & Defense, Electrical Power Solutions, Distribution and Thermal & Climate Technology.
Connect with Baird’s Global Industrial Group
While uncertainties remain, we believe second half of 2026 represents an even more attractive environment to pursue transactions for high-quality businesses. We are excited about our current transaction velocity and the high levels of engagement we are seeing across the market.
To explore opportunities in your sector or discuss market trends, connect with our Global Industrial Investment Banking team.
