17 August 2026

In over half of all Southern European M&A transaction processes (53%), advisors report that sellers' valuation expectations are too high, a gap that averages 26% and breaks the deal in 38% of those cases. Deal activity is shifting too, with transactions above €7.5 million gaining the most ground as the mid-market moves upmarket.

These are among the key findings of the latest edition of the Dealsuite Southern Europe M&A Monitor, which tracks the mid-market across Spain, Italy, Portugal and Greece every six months.

A Persistent Gap, Now Quantified

Dealsuite has flagged unrealistic seller expectations as the top reason deals collapse in the Southern European market for years. This edition is the first to measure the scale directly: how often it happens, how wide the gap runs, and how often it kills the deal.

Rather than walk away, advisors are increasingly structuring around the gap. Deferred payments and other forms of risk-sharing between buyer and seller are being applied more frequently, according to Dealsuite's Deal Terms Report, a sign that the market is adapting to the gap rather than letting it routinely kill deals.

Floyd Plettenberg, CEO of Dealsuite, says the numbers finally put a figure on something advisors have felt for years: "A deal doesn't usually fall apart because a buyer walks away for no reason. It falls apart because the seller is anchored to a number the market won't pay. Now we have measured that gap, and how often it actually breaks a deal. This is the kind of transparency that avoids dealbreakers and helps close more deals."

As Ricardo Valles, Partner at Glowside Group, explains: "In Iberia, earn-outs are the instrument of choice for bridging valuation gaps, sometimes paired with rollover or sweet equity. But they only work if the seller stays on to manage the business, typically for up to three years. We see this in the large majority of our deals, especially businesses coming out of a restructuring or presenting an ambitious, high-growth plan."

Buyer Interest Holds Steady, With Big Swings by Sector

The average number of serious buyers per company for sale held steady at 8.4 in H1-2026, unchanged from a year earlier, though interest varied sharply by sector. Industrial & Manufacturing saw by far the largest gain, up 2.3 points to 12.3, followed by Business Services (9.2, up 1.5) and Automotive, Transportation & Logistics (6.6, up 1.0).

As Julien Lagenette, Co-founder & Partner at You are Capital, explains: "At You are Capital, we still see room for a continued increase in Business Services M&A deals in the coming months, driven by high demand for recurring, specialised and AI & tech-enabled services as well as private equity-led build-ups in a highly fragmented and lower middle market segment."

E-Commerce & Webshops saw the steepest pullback, down 1.9 to 6.5, while Agri & Food (6.7, down 1.7) and Retail Trade (4.1, down 1.0) also cooled. IT Services and Software Development remain the most sought-after sectors overall, at 14.3 and 13.7 interested parties respectively.

Overall transaction volume held up well: 47% of advisors reported an increase in completed deals, against 12% reporting a decline, with the remainder stable.

Average EBITDA Multiple Holds at 5.4

Valuations across the Southern European mid-market were broadly stable, with the average EBITDA multiple unchanged at 5.4. Healthcare & Pharmaceuticals and Industrial & Manufacturing posted the largest gains, both up 0.2, while Retail Trade was the only sector to ease, down 0.1.

Company size remains a decisive factor in valuation: multiples for smaller businesses (€200,000 EBITDA) held at 4.0, while larger companies (€10 million EBITDA) traded at 7.6, a gap of 3.6 points, reflecting the so-called Small Firm Premium applied to compensate for the higher risk profile of smaller businesses.

Southern Europe also commands the highest, or joint-highest, EBITDA multiples in Europe for Retail Trade, Automotive, Transportation & Logistics and Hospitality & Tourism, sectors closely tied to the region's tourism and consumer economy.

Business Services Leads Sector Outlook for H2-2026

Looking ahead, sentiment keeps strengthening: 92% of advisors describe themselves as optimistic about H2-2026.

Advisors were also asked which sectors they expect to see the biggest changes in deal activity in H2-2026. Business Services now tops the list of sectors expected to grow, followed by Industrial & Manufacturing and Healthcare & Pharmaceuticals. On the decline side, Automotive, Transportation & Logistics moved into the top spot, followed by Retail Trade and Media & Communication, another new entrant.

As Lucio Trigo, CEO of HM Consultores, explains: "Capital is rotating away from structurally challenged business models toward more defensible assets. Across the market, we see buyers placing a premium on recurring revenue, first-party data and proprietary IP, while increasingly discounting scale or reach where it doesn't translate into ownership or pricing power." 

Taken together, the data point to a Southern European mid-market that keeps building momentum: deal activity moving upmarket, a valuation gap now measured for the first time, and confidence heading into H2-2026.

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