M&A Market Pulse | 2026
Middle-Market Perspective (Source: Lazard)
According to Lazard, a global M&A advisory consultancy firm, 2026 is expected to deliver sustained, elevated M&A activity, as stable financing conditions intersect with strong strategic and private capital drivers—creating a favorable environment for well-positioned middle-market companies.
Key themes shaping the year ahead include:
- Increased strategic acquisitions by large corporate buyers
- Accelerating private equity exits and reinvestment, driven by longer holding periods, narrowing valuation gaps, and significant undeployed capital
- Active dealmaking in innovation-led sectors, including software, AI, and healthcare
- A constructive financing backdrop, supported by private credit, bank financing, and flexible capital structures
What this means for middle-market businesses: companies with clear growth strategies, clean financials, and strong management teams are likely to see increased inbound interest, from both strategic buyers and financial sponsors, throughout 2026.
Employment Law Update
Outlawing “Stay or Pay” Provisions – AB 692
AB 692 makes it unlawful to require employees to execute, as a condition of employment, a contract that requires the worker to “pay an employer, training provider, or debt collector for a debt if the worker’s employment or work relationship with a specific employer terminates.” This law applies to all employment contracts executed on or after January 1, 2026, that improperly require employees to repay certain benefits received during employment.
However, not every payment is protected by AB 692. For example, under certain conditions, employers can seek repayment for the cost of tuition for a transferable credential, as well as contracts for the receipt of discretionary or unearned monetary bonuses that are provided at the outset of employment and not tied to specific job performance.
When violated, AB 692 creates a private right of action for employees, including a minimum of $5,000 in damages per worker, injunctive relief, and attorneys’ fees and costs.
To read our full 2026 Employment Law Update, click here.
Annual Corporate Reminder
Delaware Franchise Tax Deadline – March 1
A reminder for Delaware corporations: franchise taxes and annual reports are due March 1.
Failure to file on time can result in:
- Penalties and interest
- Loss of good standing
- Delays in financing, transactions, or corporate actions
If you have questions about your filing obligations or need help confirming compliance, we’re happy to assist.
Deal Highlights
Select 2025 M&A & Corporate Transactions
Firm Spotlight
SWSS Litigation Team Named
Law360 Legal Lions of the Week
The case arose from a dispute over parking spaces outside a San Diego pizzeria that escalated into litigation after SWSS client American Pizza Manufacturing was subjected to an extended course of hostile conduct, including disparaging online activity and other actions that interfered with its business operations. The individual responsible asserted that his conduct constituted protected speech, while American Pizza Manufacturing maintained that it crossed the line into unlawful harassment and defamation.
After the trial court denied an effort to dismiss the case under California’s anti-SLAPP statute, the SWSS litigation team led by Owen Praskievicz, who represented American Pizza Manufacturing and its owner throughout the matter, successfully defended that ruling before the full Ninth Circuit Court of Appeals. In a landmark decision, the court overturned 22 years of Ninth Circuit precedent in this area of law, allowing the case to proceed on the merits.
The ruling has since attracted significant interest from litigants and practitioners around the country and earned the firm recognition in October 2025 as Law360’s Legal Lions of the Week.
Firm Leadership Update
Transactional Department Leadership
I’m pleased to share, effective January 1, 2026, I have stepped into the role of Chair of the Transactional Department at SWSS.
I look forward to continuing to build a collaborative, practical, and client-focused transactional platform, working closely with our corporate, real estate, intellectual property, tax, and trusts and estates teams to support clients at every stage of their businesses.
Thank you to our clients and colleagues for the trust placed in me and for the privilege of working alongside such an exceptional team.
Patrick Klingborg
Patrick helps clients with starting a business, investing in a business (venture financings, equity purchases, convertible notes, SAFEs, etc.), buying or selling a business (M&A), and negotiating a variety of commercial transactions. He received his Bachelor of Arts from UC San Diego and his law degree from University of San Diego School of Law.