Plastics M&A looking to rev back up in second half

Mergers and acquisitions deals in the plastics industry were climbing high early in 2026, but slowed as the U.S. and Israel attacked Iran. Industry watchers expect to see recovery in the second half of the year.

For plastics mergers and acquisitions, deal volume got off to a hot start in 2026 before slowing down. Market watchers now are waiting to see if that slowdown is temporary. “[The first quarter] was really strong and it was looking like a monster year,” said John Hart, managing director with PMCF Investment Banking in Southfield, Mich.

“Then it pulled back a bit, possibly because of the Iran war, but Q2 was still a strong quarter. “If we have two more quarters like Q2, it’s going to be a very strong year overall,” he added. First-half deal activity also has created a slight seller’s market for plastics M&A.

“There’s no shortage of buyers and sellers, but buyers seem more selective,” said Jonathan Soucy, president of MBS Advisors in Florence, Mass. David Evatz, managing director at BellMark Partners LLC in Boston, added that there’s “an imbalance of buyers and sellers — this is a good time to sell if you have a good business.” Looking at first-half activity, Peter Schmitt said there’s “a gap between deal activity and operating fundamentals — deals are getting done but buyers aren’t paying for today’s growth.” “COVID and tariffs were a one-two punch.

A lot of companies tried to stay in one piece,” he added. Schmitt is managing director at Montesino Associates LLC in Wilmington, Del. The market is shaped “like a barbell,” with some big deals like Huntsman Corp.’s merger with Olin Corp. in the materials space, according to Schmitt.

Buyers are “as interested as ever in high quality assets, there’s still a problem to deploy capital,” said Andy Hinz, managing director at Grace Matthews in Milwaukee. He defined high quality assets as specialty businesses with high margins and high growth. Mike Benson, managing director at Stout Investment Banking in Chicago, added that buyers are looking for end market diversification or new geography or a pipeline for new business.

“A lot of buyers are financial buyers or strategic buyers owned by private equity,” he said. “They have capital and the desire to grow.” Good companies “will sell, but plain vanilla companies won’t provide a higher multiple,” said Phil Karig, principal at Mathelin Bay Associates in St. Louis.

Marketwise, there could be more deals in thermoforming and injection molding than in blow molding, according to Darrin Kert, M&A director with Plastics Machinery Group in Bedford Heights, Ohio. “It depends on your customer base and who and what you have,” he said. “There’s a potential return to normalcy in the packaging market,” said Cael Pulitzer, managing director with Brown Gibbons Lang in Cleveland.

“And there’s a huge amount of capital overhang.” “The market is hungry for deals,” said Rick Weil, managing director with Mesirow Investment Banking in Chicago. “It’s a good time to go to market when your business is performing well and volumes are up.

Buyers are looking at how differentiated a business is and how they can grow it.” Big data The first half saw 226 plastics M&A deals, according to PMCF data. That’s up by 19 transactions or 9 percent vs. the same half in 2025.

Private equity was involved in 112 deals, the second highest total in the last nine six-month periods. Based on end market, industrial led the way with 142 deals, 63 percent of the total. In the product segment, industrial also ranked first with 71 deals, 31 percent of the total.

In sector, specialty — including extrusion and composites — held the top spot with 98 deals, 43 percent of the total. The number of industrial deals was up by 17 vs. the previous half, while in product segment, building products showed a gain of seven deals. By sector, six more deals were reported in resin, color and compounding.

“Evaluating the timing of a sale is largely company specific, although the market does play a role,” PMCF’s Hart said. Conflict in Iran The conflict in the Middle East created some uncertainty in the global economy, slowing the number of deals seen from the first to second quarters. Others didn’t see much impact from the conflict.

“There was some uncertainty in the spring because of the war in Iran, but here was no material impact,” said Hinz at Grace Matthews. The conflict caused some procrastination, but new deals were still getting done, according to Bill Ridenour, owner of Polymer Transaction Advisors in Foxfire, N.C. The conflict also has led to higher prices for resin and other raw materials, but Hinz said companies are more experienced at handling price increases now.

“They’re more skilled at passing on price increases,” he added. “If companies can pass through price increases, the impact on their valuation could be neutral,” said Evatz at BellMark. “Businesses that use a wide range of resins not just commodity polyethylene or polypropylene could do better.”

“Deals could get done if companies could show they were able to pass on the raw material increases,” added Hart at PMCF. Firms also have more visibility more than a year after major tariffs were introduced in the U.S. “The tariffs were a bit of a shock factor,” said Thomas Blaige, chairman and CEO of Chicago’s Blaige & Co.

“Companies are more relaxed now.” Private equity presence Private equity firms may have held on to assets longer than they had planned to, meaning they need to sell in 2026. “A lot of private equity firms are beyond five years now and they need to start thinking about a sale,” said Hinz.

“But the market is sophisticated enough that buyers aren’t going to get a preferred sale. Some [PE firms] will hold out on selling.” Schmitt said the market is still in a PE platform building cycle, but Benson added PE may prefer to do bolt-on acquisitions, especially if previous platforms didn’t pay off as expected.

“They’re making their platform investment better by making acquisitions,” he said. “If PE firms can’t get what they want [from a sale], they’ll pivot to another strategic type of deal,” Schmitt said. “Private equity is always interested,” Ridenour said.

“They can outprice strategic buyers.” Karig said that PE “is still looking at plastics, it’s just a question if they can find someone they want to buy.” On both PE and the individual buyer side, sellers want to sell but don’t have enough visibility, according to Evatz.

“The cost of doing business is higher across the board,” he said. At BGL, Pulitzer said there’s “a large backlog” of PE transactions that are likely to take place in the next few quarters. Blaige pointed out that some firms have been sold to private equity several times and that as a result “all the juice is out of the lemon.”

International effect Ridenour has seen increased interest in buyers from outside the U.S. wanting to have assets there because of better economic results. “They want a manufacturing base here vs. sending product across the ocean. They want an independent entity in the U.S.”

Hinz said some international buyers seeking manufacturing assets have reached out proactively to be included in sales processes. “They want exposure to the U.S. market, which is a higher growth market,” he added. Blaige said his firm has been contacted by Canadian firms who want to own assets in the U.S. because of tariffs.

“Companies that thought they would sell in ’25 now need to sell in ’26,” Mesirow’s Weil said. “They’ve got their earnings house in order.” “A significant number of companies are ready to be sold, but their performance isn’t where they want it to be,” said Soucy at MBS.

“A lot of would-be sellers aren’t in a position to sell,” added Benson at Stout. Weil said international deals might be “easier said than done” because it’s hard for international firms to compete vs. American buyers. According to PMCF, buyers from outside the U.S. were involved in 67 percent of first-half deals, up from 60 percent in the same period last year.

“There’s been an increase in cross-border activity as foreign firms look to invest in the U.S. because of tariffs,” Hart said. Strength in packaging, medical Packaging and medical again led the way as markets where buyers are looking to make deals. Weil said packaging interest is strong in consumer, food and beverage and household goods.

Benson pointed put that the healthcare market has layers like packaging and consumables and testing and “each is a little different.” According to Blaige, the packaging market remains attractive, but buyers “want a sustainability story to go along with it.” Soucy cited aerospace as a solid market and said automotive “is starting to tick up a little bit.”

Evatz touted data centers, clean room medical and defense as solid markets. “Buyers want more stable, less cyclical industries,” he said. Hinz said that strategic and PE buyers “are as aggressive as ever in building relationships in advance of a sale.”

“Confidence is key,” Benson said. “Sellers need to be confident in their business in the short-term and long-term outlook and buyers need to feel some certainty in the market.” Second half and beyond Looking to the second half, Soucy at MBS said “we’re feeling kind of bullish right now – we think it will be a pretty good second half.”

“We’re quite optimistic about the second half and into 2027,” said Hinz at Grace Matthews. “Companies have more than a year of post-tariff impact — a year of clean results — which should provide more consistency and variability.” Benson at Stout sees the second half “flat if not up. ....

There’s a little bit of optimism because the economy is doing reasonably well. It comes down to end markets for a lot of companies.” Blaige said the M&A market “will get better momentum as the year keeps going farther away from 2025.”

He also expects corporate divestitures to continue. “Companies are trying to sell off their sins,” he said. Weil at Mesirow expects a good second half, with the Middle East conflict calming down and the economy remaining in good shape.

Kert at PMG said the market could see growth if raw material prices continue to decline. Hart said although there’s been some weakness in packaging, the market overall is “a decent one” for sellers. “We’re hearing some positive signs in the market, but I’m more optimistic about 2027 than the second half of 2026,” said Pulitzer.

“Overall, it’s a good market, but it could be better,” said Evatz. “The back half of the year could be stronger with more clarity.” Check out our exclusive Mergers & Acquisitions Tracker to find a roundup of plastics industry deals in the last 12 months M&A Tracker