Commercial Due Diligence in 2026: Significant Demand Shifts and AI Adoption

Before money changes hands (the deal is made, that is), it is important that the prospective buyer examines its target company in detail. The main things to look at are the firm’s commercial activity, market trends, size and growth, customer behavior, and the target’s competitive position against rivals.

That is commercial due diligence (CDD), and the report obtained by the buyer offers detailed insights that represent the foundation for a deal. CDD is carried out externally by specialized companies (law firms, market intelligence data providers) or internally by deal teams or units (increasingly adopting and integrating artificial intelligence agents).

Mergers and acquisitions (M&A) and related transactions, such as private equity (PE) investments, rely heavily on CDD, since it assists investors in determining whether a business is truly worth purchasing.

According to LSEG, a financial markets infrastructure and data provider, even though the value of global M&A activity is growing, the number of transactions (its volume) is in decline. From January to July 2026, the value of announced M&A deals showed a 36% year-on-year increase, hitting US$3.19 trillion. At the same time, the number of announced transactions fell by 10%.

A similar pattern emerged in private equity. According to PwC, the number of PE deals remained nearly unchanged in Q1 2026 compared to Q1 2025, while the value fell 14% to US$482 billion.

Suggested reading: Primary Research vs. Secondary Research: Which One Does Your Organization Actually Need?

What is commercial due diligence?

Commercial due diligence represents an objective review of a target company's market, competitors, clients, and business plan, and its goal is to challenge the commercial assumptions behind a deal before the parties reach any agreement.

Reviewers gather facts about the market, the competition, and the customers and check them against how the company has actually performed.

Sometimes, a buyer may request a full CDD that may include financial, tax, and legal checks, as noted by KPMG in one of its articles.

In any of the scenarios and depths of a CDD, the end goal is the same: to provide the interested party with a clear and detailed understanding of the target company from a commercial perspective.

Suggested reading: How Technology is Reshaping M&A Due Diligence

Demand for CDD in 2026: What the evidence shows

The deal market: more value, fewer deals

The two information sources mentioned below - LSEG and Bain & Company - show the value of the market, with LSEG additionally reporting deal count.

Deal-market indicators

*The sources use different definitions and time periods, so we did not combine the figures. According to LSEG, a small number of very large deals (over US$10 billion each) account for most of the total deal value, while mid-sized deals remain less active.

With M&A activity becoming more concentrated, does this imply that firms and investors are changing the way they evaluate acquisitions?

The available data does not show a rising demand for CDD.

Private equity, a core buyer of CDD, shows a mixed picture

Private equity firms (PEs) are major buyers of commercial due diligence since it is a key component of M&A. In this market, a CDD report can be as simple as a brief market check or as complex as a thorough examination of the industry, competitors, prospects for expansion, and possible future acquisitions.

A tap into the PE demand for CDD gives a picture of a mixed situation:

• Bain & Company reports that between January and May 2026, the total value of deals involving PE firms and other financial investors showed a 9% decrease.
• At the same time, the value of deals carried out by firms to support their business strategies increased by 36%.
• PwC reports 5,174 PE deals in Q1 2026, compared with 5,176 deals in Q1 2025. But even though the number of deals remained nearly the same, their total value fell 14% to US$482 billion.

*Because Bain & Company and PwC cover different periods, their figures should not be treated as one single trend.

According to a survey carried out by KPMG, 37% of PE dealmakers and 20% of corporate dealmakers expected to complete more than five deals in 2026.

This may suggest that PE firms may create more demand for CDD than corporate buyers, but this is just a hypothesis, not a confirmed conclusion. The amount of CDD work that will be commissioned is not determined only by deal activity expectations.

KPMG surveyed 700 M&A decision-makers (519 corporate dealmakers and 181 PE dealmakers) across 20 nations and jurisdictions between December 19, 2025, and January 27, 2026. Respondents worked at companies with annual revenue of at least US$1 billion in the United States and US$0.5 billion in other markets.

Why there is no reliable CDD market-size number

There is no single authoritative market-size figure, and the ones that are available today show very different numbers.

We analyzed a dozen vendor-published market reports and found that while some put the global CDD market value for 2025 at US$2.51 billion, others provide a figure of US$4.5 billion (or more), showing a nearly 2x gap for the same year.

These are almost all paywalled “market research” products that use secondary data and opaque methodologies and can mix commercial due diligence with broader due diligence.

No major consulting firm or independent research house provides a comprehensive, transparent volume estimate that the industry can treat as authoritative.

How deal teams may be changing the way they work

We looked at four market signals.

1. Paying more for a company means less room for mistakes

As company valuations increase, they raise the stakes for investors. McKinsey reports that the median buyout price in 2025 was 11.8 times earnings before interest, taxes, depreciation, and amortization (EBITDA), while debt made up a smaller share of purchase prices compared to previous years.

For investors, this means that the company needs to perform well. In a specific case of an investor buying a software company, they need evidence that it can:

• attract new customers.
• keep existing customers.
• increase its product prices.
• enter new markets.
• increase profits.

What does this mean for CDD, in our opinion?

For CDD, this could mean more focus on important questions: Can the company raise product prices? Can it keep its customers? Is the market still growing? These questions can become critical when an investor is paying a high price for the company.

2. Dealmakers say artificial intelligence (AI) is entering due diligence

The survey data from KPMG's 2026 Global M&A Outlook shows the following:

• 56% of dealmakers say that they are using agentic AI when it comes to due diligence and valuation.
• 59% of those surveyed report a greater than 10% efficiency gain in competitive intelligence and market analysis.

KPMG outlines that AI is being applied across the entire M&A lifecycle, including assisting companies in market analysis, decision-making, and more.

What does this mean for CDD, in our opinion?

Analysis that previously could have been rather costly or time-consuming may now be worth doing. At the same time, we don’t know if this will increase the number of CDD projects or make them cheaper.

3. A law firm says AI exposure comes first

Reed Smith, an international law firm, mentioned that AI displacement risk (the risk that AI could reduce the need for a company’s product or service or make it less valuable) has become "a gating question" for any technology-related deal.

So, before deciding to buy a technology-related firm, it’s crucial for investors to understand not only the current strength of the business in question but also whether AI can affect it over the next few years.

What does this mean for CDD, in our opinion?

If you want to understand the hypothetical risks of AI, you need to look at its impact on the specific market you are investing in. CDD thus helps, often with the assistance offered by experts who know the market well.

Experts can be reached via expert networks.

4. Dealmakers say they are heading toward carve-outs and smaller deals

According to KPMG's 2026 Global M&A Outlook survey:

• 71% of PE respondents said they were considering selling or separating companies they own or were already doing so.
• 55% are considering carve-outs, compared with 21% of corporate respondents. A carve-out involves selling or separating a business unit from a larger company.
• 95% of PE dealmakers anticipate that their next transaction will be worth less than US$1 billion. Note that these are expectations, not completed deals, so we do not claim the deal mix has changed.

What does this mean for CDD, in our opinion?

A business unit may have an established operating history but lack a track record as a standalone firm. Therefore, in addition to the available financial data, buyers may need to evaluate the company's market position, client base, earnings potential, and capacity for independent operation.

Where do expert calls fit in commercial due diligence?

CDD evidence typically involves information about the market, competitors, and customers.

One common way to collect this evidence is through in-depth interviews with customers and other market participants, which can help collect first-hand market insights.

Expert Network Calls (ENC) is a marketplace of 22 expert networks. A deal team researching its next merger or acquisition project can source calls across several networks through one platform.

*Note that ENC does not conduct CDD or prepare diligence reports. Expert calls are a research input, not a CDD engagement.

*Compliance note: Expert calls must not involve confidential information about a current employer, or material non-public information (MNPI). Screening rules apply. This is standard expert-network practice.

ENC connects deal teams with expert networks through one platform, with no subscription and no prepayment.

Launch your ENC project.

Commercial due diligence Frequently Asked Questions (FAQ)

What is the meaning of commercial due diligence?

Commercial due diligence (CDD) is an objective review by a buyer of a target company's business activity and future viability. A CDD report gives the buyer a detailed view of market demand, the target’s commercial position, revenue, and competitive landscape. Overall, it offers the evidence needed to evaluate the opportunity and forms the basis for the deal.

What is the difference between financial and commercial due diligence?

Commercial due diligence evaluates a company's business activity, its clients, business plan, prospects for expansion, and advantages and disadvantages compared with competitors. Financial due diligence concentrates on the numbers, confirming the integrity and correctness of financial data to make sure what the target company says matches up with the facts.

The two answer different questions and are usually done by different teams.

How long does commercial due diligence take?

Three to six weeks, but sometimes it may take longer, according to KPMG. However, it’s worth noting that several factors can influence the time required for the CDD process, including the scope of work and the geographic coverage.

Who pays for commercial due diligence?

Market practice is that commercial due diligence is paid for by the buyer (except in the case of vendor due diligence). In vendor commercial due diligence, the seller pays for the analysis and shares the resulting report with potential buyers.