USA – NEW YORK Trends and Developments Contributed by: Pieter A. Weyts, Nicolas Teijeiro, Corina Gugler and Sofía Yagüe, Next Legal
Next Legal 1200 Brickell Avenue, Suite 650 Miami, FL 33131 USA Tel: +1 786 785 1715 Email: info@nextlegal.us Web: nextlegal.us
Background Deal-making is on the rise in New York and across the United States, fuelled by actual and expected Fed- eral Reserve rate cuts and the benefits of deregula- tion. Technology remains at the forefront of the M&A scene, with artificial intelligence (AI), digital transfor- mation and technology-driven transactions continuing to dominate the landscape. Against such a positive outlook, company valuations are expected to rise, borrowing costs to further decline and overall corpo- rate and private equity (PE) M&A activity to accelerate even more in 2026. This uptick reinforces a strategic alignment between buyers seeking technology capa- bilities and sellers aiming for value realisation amidst improving market sentiment. While valuations remain below the 2021 peaks, crea- tive deal structuring has helped bridge pricing gaps and better align parties’ incentives in recent years to keep deals flowing, including by crafting innova- tive performance earnouts, preferred equity features, seller roll-overs and contingent consideration mech- anisms. Legal advisers are increasingly proposing hybrid structures such as minority investments with enhanced control or veto rights over key decisions, or staged acquisitions, in order to mitigate risk while preserving upside. Earnouts tied to specific techno- logical milestones, regulatory approvals or user met- rics have also become common, reflecting the need for flexible tools that capture future value creation in volatile environments, both in terms of valuations and access to financing. Key M&A Trends in 2025 In 2025, domestic and cross-border deal activity has risen, with tech firms looking to acquire targets to strengthen their market positions and expand inter-
nationally. PE firms are also stepping up their game, deploying larger pools of capital into strategic M&A deals. Cross-border tech M&A transactions are also gaining traction, including with targets in Latin Amer- ica – particularly Mexico, Brazil and Argentina. The cross-border aspect introduces added complexity due to the implication of local corporate, labour and tax laws, as well as additional regulatory approvals and other local issues, which typically arise in multi- jurisdictional transactions. In such cases, buyers must carefully parse through foreign investment regulations, currency controls and data protection rules in order to stay compliant with US laws and regulations. With these dynamics at play, tech M&A appears poised for a strong rebound in 2026, even though investors continue to approach transactions with a measure of caution as geopolitical changes, supply chain disruptions and trade realignments are reshap- ing the world. In volatile markets, parties are advised to include contractual protections such as material adverse effect clauses, flexible closing conditions and earnout-based structures to mitigate greater levels of risk and uncertainty. The renewed optimism in New York’s technology M&A market is being driven not only by improved macroe- conomic conditions but also by sector-specific appe- tite, including investments in the areas of healthcare, fintech, cybersecurity, robotics, and aerospace and defence. Larger players keep searching for targets that can help consolidate market position and scale, focusing on strategic fit, growth prospects and readi- ness to integrate. For example, active user bases are attractive to newcomers in the fintech sector, while cybersecurity buyers pursue smaller Software as a Service (SaaS) companies with advanced threat
352 CHAMBERS.COM
Powered by FlippingBook