European Mid-Market M&A Adapts to ‘New Normal’ in H1-2025

September 18, 2025 - The European mid-market M&A landscape demonstrated resilience in the first half of 2025, with deal activity largely stable and signs of adjustment to a “new normal.” While 46% of advisors reported no significant change compared to H2-2024, 34% observed an increase. Growth was strongest in the Nordics and Southern Europe, while the UK & Ireland recorded declines. France remained broadly stable, though advisors noted some pressure in assignments and financing.

These insights are based on Dealsuite’s biannual European M&A Monitor, incorporating exclusive input from 828 leading advisory firms and proprietary transaction data.

Valuations Steady, but Regional and Sector Gaps Persist‍

The average European EBITDA multiple held at 5.3 in H1-2025, underlining stability at a continental level. Yet regional variation remains clear: DACH (5.55), France (5.25), and the Netherlands (4.9) showed little change, while CEE recorded the sharpest decline (–0.1 to 5.2). Newly included data shows Nordics (5.5) and Southern Europe (5.3) broadly in line with the European average.

Sector-wise, Software Development continues to command premium valuations, reaching 8.9 in DACH and 8.2 in the UK&I, while Retail Trade lags behind, with lows of 2.3 in the Netherlands.

Assignments and Buyer Demand Remain Robust

‍Advisors reported healthy new deal flow, with 39% seeing an increase in mandates and 26% experiencing a decline. Buyer appetite also remained strong, with an average of 7.5 interested parties per company, underscoring the seller’s market dynamic, even if slightly down from 8.3 in H1-2024. Demand was particularly strong in Software Development and IT Services.

AI and Deal Terms Reshape Dealmaking

‍Structural shifts in how deals are executed continue to emerge. AI adoption has surged, with 37% of advisors now using it regularly (up from just 7% in 2023). Advisors cite the strongest benefits in market research, legal document evaluation, and target identification, though AI adds little value in post-merger integration.

At the same time, deal structures increasingly emphasize risk-sharing. Earn-outs rose in use at 42% of firms, alongside broader reliance on warranties, indemnities, and suspensive conditions, reflecting a market adapting to ongoing uncertainty.

Outlook: Optimism with Caution

‍Looking ahead to the second half of 2025, 71% of advisors expect stable or improved market conditions. Financing availability remains a dividing line: Nordics and Southern Europe anticipate easier access to capital, while DACH and France foresee tighter conditions.

Floyd Plettenberg, CEO of Dealsuite, commented:
“A decade ago, market turbulence often paralysed M&A activity. Today, many dealmakers have adapted to operating in an environment where uncertainty is constant. This resilience is particularly visible in the SME segment, where we continue to see healthy deal flow and an evolution in deal structures that share risk more evenly between buyer and seller. It is a sign of a more mature and strategic M&A market across Europe.”

‍