As 2026 progresses, lower and middle-market acquisitions continue to accelerate across industries such as professional services, insurance brokerage, healthcare, manufacturing, and engineering. Asset purchase structures remain a popular choice, often viewed as the cleaner and safer alternative to equity deals. The logic seems straightforward: buyers can selectively assume liabilities and leave the rest behind. On paper, it looks like a clear choice for buyers. In reality, asset purchases are not the right structure for every transaction, and in some cases, they introduce complexities that temper their perceived advantages.
Asset transactions can offer meaningful benefits, but those benefits often come with tradeoffs that are easy to underestimate at the outset. The structure does not eliminate risk; it simply reallocates it.
One common assumption is that asset deals reduce third-party consent issues. In reality, they often multiply them. Unlike equity transactions, where contracts stay with the existing entity, asset purchases require the affirmative assignment of material agreements. Many contracts include anti-assignment clauses or broad change-of-control provisions triggered by a sale of substantially all assets. Even when consent is ultimately obtained, counterparties may attempt to renegotiate pricing, impose conditions, or slow the process. In relationship-driven businesses, the ability to transfer contracts can matter just as much as the assets themselves.
Asset purchases are also frequently designed to avoid legacy liabilities. In practice, liabilities rarely follow tidy lines. Service obligations, warranty exposure, employee commitments, and regulatory considerations do not always stay behind simply because they were excluded in a definition section. Successor liability principles and commercial realities can narrow the gap between what is technically excluded and what effectively transfers.
Operational continuity presents another layer of complexity. Asset deals often require new bank accounts, updated licenses, vendor re-papering, and employee transitions. Even when manageable, these steps can create friction. In service-based industries built on trust and stability, temporary disruption can carry outsized consequences.
Ultimately, the best transaction structure should not be chosen solely for its perceived liability insulation. Structure should follow substance. Parties should ask where the real value of the business resides, whether in transferable contracts, regulatory approvals, stable customer relationships, or personal goodwill.
In many lower and middle-market companies, value lies less in tangible assets and more in the relationships and agreements that sustain them. Evaluating those realities early allows buyers and sellers to select a structure and liability mitigation strategies aligned with how the business actually operates, not simply how the transaction is drafted.