European M&A Monitor March 2025

Introduction

Thank you for taking the time to read this fifth edition of the European M&A Monitor. This report consolidates research conducted by Dealsuite, the leading European platform for M&A transactions. It provides statistics and trends for the European M&A mid-market (enterprises with a revenue between €1 million and €200 million) over the second half of 2024.

For this research, 2,052 key mid-market M&A advisory firms across Europe were considered, employing over 8,000 M&A professionals who form the core of the European mid-market M&A landscape. The quantitative conclusions in this report are based on in-depth contributions from 604 participating firms, supported by transactional data from 2,708 deals executed in H2-2024, along with proprietary Dealsuite data and reports. Since many of these transactions are not publicly disclosed, Dealsuite’s extensive network provides unmatched visibility into the otherwise opaque European mid-market.

The aim of this study is to create periodic insights that enhance the transparency of the European market and serve as a benchmark for M&A professionals. While we have been publishing local/regional reports for several years, this is the fifth time we publish this pan-European report, with a focus on inter- regional differences as well as similarities. We are convinced that sharing information within our network leads to an improved quality and volume of deals.

I Transactions

Increase in Buy-side Transactions Reported

Figure 1 shows the development of buy and sell-side transactions over H2-2024 compared to H1-2024.

After a period of high interest rates and inflation, 2024 marked a shift towards recovery across Europe, though regional trends varied. The UK&I, CEE, and the Netherlands saw steady growth throughout the year, with buy-side transactions rising by 8% in the UK&I, 6% in the Netherlands, and 3% in CEE, supported by interest rate cuts and improving market confidence. In contrast, the DACH region experienced a slight decline, with buy-side transactions down 3% and sell-side down 4%, likely indicating market stabilization rather than a downturn. France followed a different trajectory, with an initial increase in activity in the first half of the year, followed by a slowdown in the second half, where buy-side transactions dropped by 6% and sell-side by 7%.

On average, buy-side transactions across the four regions increased by 2%, while sell-side transactions remained stable.

I Transactions

Most Transactions Closed in the Business Services and Industrial and Manufacturing Sectors

The distribution of transactions completed in H2-2024 across sectors is illustrated in Figure 2. There is a correlation to be expected between the relative size of a specific sector in the mid-market and the percentage of closed transactions. Most transactions were closed again in the Business Services sector (17%). A drop of 2 percentage points was reported in the Hospitality & Tourism sector to 2%. In France, only 3% of transactions were completed in the Wholesale Trade sector, compared to 8% in the Netherlands. A notable difference also appears in the Business Services sector, where 11% of transactions in the DACH region were within this sector, while the United Kingdom and Ireland saw a significantly higher share at 22%.

II   Sector Multiples per Country

EBITDA Multiples Varied by Region, with Some Increasing and Others Decreasing, While the European Average Rose Slightly

Sell-side advisors defined the average EBITDA multiple by industry. In this edition, we asked to revise the industry multiples from H1-2024. The results are shown in Figures 3 and 4.

TThe average European EBITDA multiple increased slightly in H2-2024, rising from 5.2 to 5.25. When examining regional averages, three out of five regions saw an increase, with the largest rise in the UK & Ireland (+0.15). In contrast, DACH and France experienced declines, with DACH dropping slightly by 0.05 to 5.55 and France decreasing by 0.1 to 5.25.

When comparing the average EBITDA multiples of the various European countries, it is clear that involving a foreign party in the purchase or sale of a business could lead to a higher selling price.

II   Sector Multiples per Country

EBITDA Multiples Vary by Region and Sector, Offering Cross-border Opportunities

The Software Development sector has the highest EBITDA multiples, especially in DACH and UK&I, while CEE, France, and the Netherlands show lower multiples. A similar trend is seen in Healthcare & Pharmaceuticals, with DACH and UK&I leading. The Retail Trade sector has the lowest multiples, particularly in the Netherlands and DACH. The Hospitality & Tourism sector shows significant regional variation, and the Agri & Food sector remains consistent across regions. These variations offer insights into regional pricing differences and sector-specific trends, which can help inform strategic decisions in mergers, acquisitions, or market expansion.

III   Multiples in relation to  company size

Big Difference Between Multiples for Large and Small Companies

The size of a company plays a crucial role in determining multiples in business valuation across Europe. For small and medium-sized enterprises (SMEs), accurately quantifying the impact of the Small Firm Premium is essential. This is particularly relevant for businesses with an EBITDA ranging from €200,000 to €10,000,000.

Studies have shown that smaller companies face a higher likelihood of not achieving their expected cash f lows (Damodaran, 2011; Grabowski & Pratt, 2013). This can be attributed to factors such as reliance on specific customers or suppliers, or dependence on unique technical expertise that may be lost if key employees leave.

Such vulnerabilities can significantly impact a company’s returns and, consequently, its valuation. The elevated risk premium associated with smaller businesses, known as the Small Firm Premium, leads to a reduction in value. As a result, EBITDA multiples for larger companies tend to be higher on average compared to those for smaller companies.

The results of this survey confirm once again that companies with a low EBITDA have a lower multiple than those with a high EBITDA. The influence of company size on EBITDA multiples is further illustrated in Figures 5A and 5B.

On average, the difference in EBITDA multiples between companies with a normalized EBITDA of €200,000 and €10,000,000 is 3.3 (3.9 compared to 7.2). The most significant gap in multiples between small and larger firms is observed in the UK & Ireland, where companies with an EBITDA of €200,000 see multiples of 3.3, while those with €10 million EBITDA achieve multiples of 8.4, a difference of 5.1.

III    Multiples in relation to company size

IV    Deal Success Rates

On Average, 68% of Sell-side Assignments Result in a Closed Deal

In the current market, there is an average of 8.3 buyers per company listed for sale (Dealsuite Monitor, September 2024). However, not every sell-side assignment results in a successful deal. Figure 6 shows the most common reasons why sales processes are prematurely terminated.

On average, 68% of sell-side assignments result in a closed deal, while 32% of transactions are dis con tinued early. Comparing the regions, the Netherlands has a relatively high success rate of 78%, compared to 62% in the DACH region and 59% in the CEE region.

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Recent findings indicate a shift in the success rates of M&A deals: of the 68% of sell-side assignments that ultimately result in a transaction, an increasing proportion is considered successful. Twenty years ago, 70% of closed deals failed because the outcomes did not meet expectations, whereas today, an average  of 70% of closed deals are deemed successful (Bain & Company, 2023). Several factors contri bute to this improvement, including the fact that mergers and acquisitions are now more frequently pursued for diverse strategic purposes rather than solely for scaling and cost savings. This demonstrates that M&A,  in most cases, genuinely creates value (Dealsuite Trends Report, 2024).

V    Dealsuite Platform Data

28% of Sell-Side Mandates Posted Had Revenue of Over €10 Million

Figure 8 shows the annual revenue of companies offered for sale on Dealsuite in H2-2024. Depending on the transaction timeline, some of these deals will be completed, while others may fall through in H1-2025. We can consider this data a tentative forecast of the size of companies likely to be sold in the coming quarters. The platform data for H2-2024 shows that 33% of the deals listed on Dealsuite have a turnover of between €1 million and €3 million. 28% of companies have a turnover of more than €10 million. This data can be seen as a preliminary estimate of the size of companies that are likely to be sold in the coming quarters.

The revenue sizes posted on Dealsuite provide a fair representation of the market. Approximately 30% of the companies in Europe have a revenue over €10 million, aligning closely with the 28% of companies listed on Dealsuite. This demonstrates that the M&A industry has fully embraced online deal sourcing via Dealsuite.

VI  Outlook

Positive Expectations for H1-2025

Assessing the performance of the European M&A mid-market is based on many factors, including the willingness of entrepreneurs to sell their businesses, funding availability, macroeconomic developments etc. An interpretation of these factors is needed to determine how the market will develop. The survey included both assessments of the M&A mid-market in H2-2024 (retrospective) and H1-2025 (projection).

The majority of advisors (66%) look back at H2-2024 with satisfaction, while 34% are less pleased with its performance. Looking ahead, expectations for the first half of 2025 are generally positive, with 69% of advisors expressing optimism.

Advisors in the Netherlands are the most optimistic about H1-2025, with 79% expressing a positive outlook. In the UK & Ireland, 47% of advisors have negative expectations for the first half of the year. In other regions, the vast majority of advisors remain optimistic about H1-2025.

VIII  Method

The majority of M&A transactions take place in the mid-market. This M&A Monitor uses the definition of a mid-market company as having a revenue between  €1 and  €200 million.

Dealsuite maintains direct and ongoing contact with thousands of M&A advisory firms, ranging from boutique firms to large-scale advisory firms. For this research, 2,052 key mid-market M&A advisory firms across Europe were considered, collectively employing over 8,000 M&A advisors and forming the core of European mid-market deal activity. These firms provide critical insights into private transactions in the European mid-market, which are often undisclosed or not widely shared. This extensive network offers unparalleled visibility into the otherwise opaque M&A mid-market.

The quantitative conclusions in this report are based on the expertise and in-depth contributions of 604 participating M&A advisory firms, supported by transactional data from the 2,708 deals they collectively executed in H2-2024, along with proprietary Dealsuite data and reports.

The quantitative conclusions in this report are based on:

•    In-depth contributions from 604 leading European M&A advisory firms

•    Firsthand transaction data from 2,708 mid-market deals closed in H2-2024

•    Dealsuite transaction data 2015-2024

•    Dealsuite M&A Monitors 2015 - 2024

This study is further supported by separate regional Dealsuite reports, analyzing the mid-market M&A landscape in the CEE, DACH, UK&I, France, and the Netherlands.

Additional sources used:

•    Bain & Company. (2023, March 28). How companies got so good at M&A.

•    Dealsuite M&A mid-market trends report 2024

•    Field, A. (2011) Discovering Statistics SPSS. Third edition, SAGE publications, London. 1 -822

•     Harding, D., & Rovit, S. (2004). Mastering the merger: Four critical decisions that make or break the deal. Harvard Business Press.

This research was conducted by Jelle Stuij and Roos Bijvoet. For further questions, please contact Jelle Stuij.

To discover how Dealsuite can benefit your business—contact Maarten Reinders, CCO.