M&A mid-market trends report 2025

Market trends

The M&A landscape is evolving rapidly. Most listed and large companies are now active in mid-market M&A and are professionalising their capabilities. Mid-market companies are becoming more active, with many new entrants recognising the attractiveness of this segment due to: 1) its large number of companies, 2) the financial and operational optimisation opportunities, and 3) the ability to participate on both the buy-side and sell-side. Demand for investment opportunities is high, and sellers can expect multiple serious buyers. Factors such as industry convergence, the demand for ESG and DEI, and economic volatility are diversifying M&A objectives and deal structures. Additionally, the rise of search funds is notable, with more entrepreneurs becoming first-time CEOs by acquiring established businesses through the ETA model, offering a quicker and less risky path to business ownership.

Strategy trends

Modern M&A requires a broad scope as growth and capability assets are often found outside traditional business boundaries. Buyers are adopting an ‘outside-in view’, with a long-term shift from ‘scale’ to ‘scope’ deals. ESG and DEI criteria have become crucial in investment decisions due to high consumer and LP demand. Research shows that active acquirers and investors outperform, especially during economic volatility. Successful acquirers are proactive, systematically searching for targets and building relationships while continuously investing in their M&A brand. Private equity firms face pressure to quickly generate cash by selling assets. This shift prioritises “distributed to paid-in capital” (DPI) over the traditional internal rate of return (IRR), reflecting tough market conditions and creating more sell-side opportunities as more companies or stakes are put up for sale.

Execution trends

In an increasingly competitive landscape, swift market access and transaction execution are crucial. The success rate of M&A deals has improved, with successes now outnumbering failures at 70%. This shift highlights the growing sophistication in modern M&A, supported by technology and optimised processes. Identifying new acquisition targets is key, even for market leaders. Today, companies actively seek opportunities, staying receptive even when not pursuing a sale. Sellers recognise their attractiveness and avoid premature exclusive engagements. Emerging trends include expanded due diligence, now covering strategic, IT, ESG, and AI aspects; the rise of acqui-hiring to address labour shortages; and the focus on successful transformations, driven by dedicated leadership.

Digitalisation of M&A processes

Geopolitical tensions have further accelerated the pace of digitalisation across all industries. In mid-market M&A, new tools increase efficiency of processes and enable a more proactive M&A strategy. Also for companies who weren’t active in transactions before. While video calls are now a standard process of nearly every deal process, the introduction of AI solutions such as machine learning algorithms for data analysis, natural language processing tools, and predictive analytics allow for quick access to data and streamlining of tasks. New ways of working deepen understanding of potential deal partners in the broader ecosystem and decrease geographical barriers. Sourcing, screening and scoring deal targets have become a matter of clicks.

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