Welcome back to The Legacy Brief.

Heirly’s monthly dispatch on the North American business acquisition market. Data-backed, and worth your time. Here is what we are watching this month.

The Market Pulse

Who is buying: Wall Street has found Main Street

The businesses drawing the largest investors in North America right now are not technology companies. They are plumbers, electricians and heating contractors. In May, Apollo agreed to take a minority stake in Apex Service Partners, which describes itself as the largest residential heating, plumbing and electrical business in the United States, with more than 150 locations in 46 states and over US$3 billion in annual revenue. The deal is expected to close this quarter at a reported valuation near US$10 billion, including debt.

Canadian money is part of this. OMERS, the pension plan for Ontario’s municipal employees, has owned TurnPoint Services, a Kentucky-based group of 65 home-service brands with more than 6,000 employees, since 2020.

The same pattern is reshaping accounting. Private equity-backed firms acquired 37 accounting firms in the United States and Canada in the third quarter, down from 58 in the first and 42 a year earlier, and the earliest investors are now beginning to sell.

What it means for you: Most businesses of our readers’ size are bought as additions to a larger group; through September, 74.9% of US private equity buyouts were add-ons. Knowing which role a buyer has in mind changes the conversation about price, terms and your role after the sale.

What owners are doing: planning to leave, not yet ready to sell

63% of Canadian small business owners expect to leave their business within the next decade, but only 6% have a plan in writing. Another 44% have an informal one, and 47% say finding a buyer or successor is their biggest obstacle.

Statistics Canada’s own survey points the same way. Of businesses intending to sell or transfer within 10 years, 50.1% expect to attract a qualified buyer and 34.6% expect a fair market price. Among those planning to sell within 2 years, 61.3% say they would likely keep operating if no buyer appears.

South of the border, an October survey of 1,104 US owners found 15% have a formal written exit plan and 18% have a professional valuation.

What it means for you: The buyers in the first story and the owners in this one are often looking for each other. For owners, the gap is frequently not demand but preparation and visibility. For buyers and their advisors, some of the best opportunities belong to owners who have not yet decided to sell.

What is changing: a federal budget this Thursday

Canada’s federal government presents Budget 2026 on Thursday, November 5. Two decisions matter most for anyone planning a sale. The first is what happens to the lifetime capital gains exemption on small business shares. The second is whether the government adopts the Canadian Federation of Independent Business proposal for a lower inclusion rate, 33% instead of 50%, on the next $2 million of gains from a business sale. We will cover what the budget means for buyers and sellers in December.

Since June, the $10 million capital gains exemption on sales to employee ownership trusts and worker co-operatives has been permanent.

What it means for you: Tax treatment changes what an owner keeps, not only what a buyer pays. If a sale is a few years away, it is worth reviewing the budget with your accountant after November 5 to see whether anything changes your timing.

The money: Canada raises, Washington is divided

On October 28, the Bank of Canada raised its policy rate to 2.5%, its first increase since 2023, and now expects inflation to stay around 3% through much of 2027. The Federal Reserve held at 3.75% to 4% the same day, but 2 of its 12 voting members wanted an increase.

In the United States, loans under the Small Business Administration’s main program fell to 56,130 worth US$32.4 billion in the fiscal year that ended September 30, a double-digit decline that lenders tie largely to tighter program rules.

What it means for you: Acquisition financing is not getting easier in either country. Buyers with more equity are better placed, and sellers should expect closer scrutiny of their earnings.

What is coming

December 9: Both central banks announce their next decisions on the same day.

Later this quarter: The next quarterly survey of US brokers and advisors gives a fresh read on how long deals take to close. In the second quarter it was 11 to 12 months for lower middle market deals.

AI in due diligence: 78% of dealmakers in a KPMG survey say AI is changing how they assess targets, yet there is no established way to build it into a valuation. Among Canadian businesses with no plans to use AI, 79.1% say it is not relevant to their work. Expect buyers to ask in 2027.

The Question

This month we asked: what should an owner ask a buyer before agreeing to sell?

“Will my business lead, or be folded into something larger?”

A consolidating buyer may keep your name, team and leadership as the base of a regional group, or absorb you into a business it already runs. The two paths lead to different prices, different roles for you after closing, and different futures for your staff, and either may come with a request to reinvest part of your proceeds in the larger group. Ask which one you are.

“Who decides once I am gone?”

Ownership changes, and so does the reporting line. Before signing, learn who will make decisions about pricing, hiring and customers, and how much of today’s team is expected to stay. In CFIB’s October report, 86% of Canadian owners said protecting their employees was important. Ask how that commitment will appear in the purchase agreement, and for how long.

“What is your clock?”

Every buyer runs on one: a fund’s holding period, a lender’s approval window, a plan to resell within a few years. Knowing it explains much of what a buyer asks for, from the closing date to how long the owner is asked to stay.

A Note From Toyin

This month’s numbers stayed with me for a simple reason. Some of the largest investors in North America are paying close attention to the kind of business many of our readers have spent decades building. At the same time, most of those owners have not yet put a plan on paper.

Neither fact is a cause for alarm. Together, they are a good reason to know where you stand. If a sale is anywhere in your future, understanding what your business is worth today is a calm, practical first step.