Current M&A Multiples Across Sectors: 2025-2026 Reference

Introduction

This article provides a data reference for current M&A and trading multiples across major sectors, designed to ground the valuation frameworks covered throughout this guide in real market data. Multiples shift with market conditions, so this reference reflects the 2025-2026 environment and must be refreshed for any live analytical work. The underlying principles (why multiples vary by sector, how interest rates affect them) are durable; the specific numbers are time-sensitive.

Global M&A surged to $4.81 trillion in 2025, the second-highest annual total on record, with deal value up approximately 40% from 2024. The recovery was driven by a record 70 mega-deals (each exceeding $10 billion), which alone contributed $1.53 trillion. A further 367 transactions in the $2-10 billion range added another $1.46 trillion. Notable landmarks included Netflix's $82.7 billion bid for Warner Bros. Discovery, the $57 billion Electronic Arts LBO (the largest in history), and Alphabet's $32 billion acquisition of cybersecurity firm Wiz.

Private equity now accounts for roughly 40% of global M&A activity by value, with the number of mega buyouts (deals above $10 billion) more than doubling from 6 in 2024 to 13 in 2025. North American M&A reached $2.65 trillion (its second-best year after 2021), while EMEA climbed 24% to just over $1 trillion and APAC reached $1 trillion (up 33%).

One of the defining features of the current market is the persistent gap between private equity and corporate buyer pricing:

PE sponsors are paying approximately 3 turns of EBITDA more than strategic buyers, a notable feature of the current cycle. This reflects over $2 trillion in accumulated PE dry powder, intense competition among sponsors for quality assets, and the willingness to pay premium multiples for companies with defensive characteristics (recurring revenue, contractual cash flows, market-leading positions). In sectors like business services and healthcare services, PE-backed buy-and-build platforms have become the dominant acquirers, bidding at levels that rival or exceed traditional strategic buyer pricing.

Understanding current multiples requires understanding the cycle that produced them:

2019 (pre-pandemic). The median M&A multiple was approximately 10x EV/EBITDA, consistent with the long-term average in a stable, moderate-rate environment.

2020-2021 (pandemic stimulus). Central banks cut rates to near zero and flooded markets with liquidity. Combined with accelerated digital transformation, this pushed M&A multiples to historic highs. SaaS companies were acquired at 30-50x revenue. Technology sector median EV/EBITDA exceeded 25x. Sponsors, armed with record dry powder and 6-7x leverage capacity, competed aggressively with strategics.

2022-2023 (rate shock). The Federal Reserve raised rates from 0% to 5.25-5.50%, the fastest tightening cycle in 40 years. Multiples compressed 40-60% across most sectors. M&A volume dropped approximately 35-40% as the bid-ask spread widened dramatically. Leveraged lending tightened, reducing LBO affordability by 1.5-2.0 turns of EBITDA.

2024-2025 (recovery). Rates stabilized. Both buyers and sellers adjusted expectations. M&A volume recovered 40% to $4.81 trillion. Current multiples sit approximately 15-20% below the 2021 peak but 10-15% above the 2023 trough. The mega-deal wave (70 deals above $10 billion) has been the primary driver, with mid-market activity recovering more gradually.

M&A multiples vary significantly by geography:

The US consistently commands the highest M&A multiples globally because of its deeper capital markets, more active PE ecosystem, greater leverage availability, and the concentration of high-multiple sectors (technology, healthcare). European multiples run 1-2 turns below the US for comparable businesses, partly reflecting structurally lower growth and partly reflecting the more fragmented regulatory landscape. North American M&A soared to $2.65 trillion in 2025 (its second-best year after 2021), while EMEA reached just over $1 trillion and APAC hit $1 trillion (both up 24-33% year-over-year).

Technology and Software

Technology remains the highest-valued sector overall, with software carrying the highest 10-year median M&A EV/EBITDA at approximately 19x across over 600 transactions with disclosed terms. Companies with genuine AI capabilities command 30-50% premiums over comparable non-AI software, reflecting both the strategic urgency among acquirers competing for transformative technology and the market's assessment that AI-enabled businesses will generate structurally higher growth. The semiconductor sub-sector has experienced extraordinary multiple expansion driven by the AI training and inference compute buildout, with NVIDIA's valuation (now exceeding $3 trillion) setting the ceiling for the sector.

For high-growth SaaS companies, EV/Revenue remains the primary multiple because many targets have negative or minimal EBITDA. The Rule of 40 (revenue growth + EBITDA margin exceeding 40%) is the standard benchmark: companies exceeding it consistently trade at 2-3x the EV/Revenue multiple of those below. PE firms (Vista Equity, Thoma Bravo, Francisco Partners) have built specialized operating playbooks for software, making them competitive with strategic buyers for high-quality SaaS targets.

Healthcare

Healthcare and IT trade at the highest median M&A multiples across sectors (12.5-12.8x), reflecting their scalable business models, recurring revenue characteristics, and strong investor demand for growth and resilience. Within healthcare, the life sciences tools sub-sector (companies providing essential research equipment, reagents, and services to pharmaceutical and biotech companies) commands the highest multiples (18-25x) because the customer base is diversified, revenue is largely recurring, and demand is driven by pharmaceutical R&D budgets that are relatively insensitive to economic cycles. Medtech companies with innovative product pipelines and regulatory moats also command premiums (15-22x), while healthcare services multiples (11-15x) are driven by the PE consolidation wave that has transformed how physician practices, clinics, and outpatient facilities are valued and acquired.

Financial Services

Financial services carry a median M&A multiple of approximately 10.3x, though equity value multiples (P/TBV, P/E) are the standard for banks and insurers since EV/EBITDA is not meaningful when debt is an operating asset. The Capital One/Discover deal ($35.3 billion, announced 2024) remains the defining financial services transaction of the current cycle, priced at a meaningful premium to Discover's tangible book value and reflecting the strategic value of Discover's payment network. Fintech multiples have compressed from 20-40x revenue in 2021 to 5-15x in 2025, tracking the broader technology repricing but with additional pressure from profitability scrutiny and reduced consumer lending margins.

Median M&A Multiple

The middle value in a set of transaction multiples for deals completed in a specific sector and time period, representing the "typical" price paid. Median is preferred over mean because it minimizes distortion from outlier transactions. M&A multiples differ systematically from trading multiples because they include control premiums and synergy expectations. The gap between the two approximates the sector's typical acquisition premium.

Industrials and Manufacturing

Industrial multiples vary more by sub-sector than almost any other category. Manufacturing experienced a reset in 2025, with multiples dropping to 6.5x as reshoring tailwinds were offset by input cost pressure and trade policy uncertainty. Aerospace and defense reached 16-18x, reflecting elevated defense spending across NATO countries (driven by the Ukraine conflict and broader geopolitical tensions) and the long duration of government contracts that provide revenue visibility.

Business services is the most active sub-sector for PE-driven M&A, with some platform deals reaching 20-23x EV/EBITDA. The premium reflects the recurring revenue characteristics of many service businesses (payroll processing, compliance services, facility management) and the proven success of buy-and-build strategies in fragmented services markets.

Consumer and Retail

Consumer and B2C sectors carry median multiples in the 8.1-8.4x range, with significant premium for brand strength and franchise models. Luxury brands (LVMH, Hermes, Prada) command the highest consumer multiples because their pricing power, global brand recognition, and resilient demand through economic cycles justify premium valuations. The 2025 deal landscape in consumer has been active: Prada Group's acquisition of Versace, 3G Capital's acquisition of Skechers, and continued PE consolidation in restaurant and retail franchise platforms illustrate the range of deal types and valuations in this sector. For lease-heavy retailers and restaurants, EV/EBITDAR (adding back rent expense) is the correct metric to neutralize the own-versus-lease decision.

Energy and Natural Resources

Energy carries the lowest median M&A multiple at 7.4x, followed by Materials and Resources at 8.9x, both impacted by asset intensity and commodity cycle exposure. The renewable energy segment commands a significant premium, reflecting the energy transition, decarbonization mandates, and long-term contracted cash flows (power purchase agreements with 15-25 year durations) that make renewables more similar to infrastructure than traditional energy. The bifurcation within the sector is striking: conventional hydrocarbon assets at 4-7x versus clean energy assets at 10-15x reflects the market's assessment that ESG-driven capital reallocation will continue to favor the latter.

Mid-cycle normalization is essential for all energy and commodity multiples because trailing EBITDA at a cyclical peak dramatically understates the "true" multiple: a company appearing cheap at 5x peak EBITDA may be expensive at 10x mid-cycle EBITDA.

Real Estate and Infrastructure

Data center REITs have been a dramatic outlier, with P/FFO multiples expanding to 25-40x as the AI power demand thesis has driven explosive growth in data center construction and leasing. The Blackstone Infrastructure consortium's $11.5 billion acquisition of TXNM Energy at 1.8x rate base illustrates the infrastructure investor appetite for regulated assets with predictable returns and exposure to the electrification trend.

Media and Telecommunications

Media multiples span the widest range of any sector. Netflix at 25-35x reflects a global streaming platform with expanding margins. Traditional cable at 7-8x reflects a business model facing secular decline from cord-cutting. The ongoing conglomerate discount at diversified media companies (exemplified by Vivendi's four-way split in December 2024) continues to drive restructuring activity as companies seek to unlock value by separating streaming, studios, and legacy distribution businesses.

As a DCF Sanity Check

When building a DCF, compare the DCF-implied EV/EBITDA multiple to the sector benchmark. If the DCF implies 18x for a company in a sector that typically trades at 10-12x, either the projections are aggressive or the company is genuinely exceptional. The sector multiple provides a reality check that prevents disconnected outputs.

For Quick Valuation in Initial Conversations

Before detailed analysis, bankers use sector multiples for back-of-the-envelope valuations in initial client conversations. "Your company generates approximately $150 million in EBITDA. Companies in your sector have been acquired at 10-13x, implying an enterprise value of $1.5-2.0 billion." This directional estimate frames client expectations before the formal engagement begins.

For Precedent Transaction Calibration

When sourcing precedent transactions, the sector multiples calibrate expectations. If the sector's median M&A multiple is 11x and the client expects to sell at 15x, the precedent set should specifically include transactions where similar premiums were achieved, with documented reasons why (competitive auction, unique synergy profile, or favorable market conditions).

Deal Value vs. Deal Count

M&A multiples can be measured by deal value (total enterprise value of transactions, skewed toward mega-deals) or deal count (number of transactions, more representative of typical deals). In 2025, mega-deals averaged 12-14x EV/EBITDA while mid-market deals averaged 9-10x, reflecting the size premium that larger, more diversified businesses command. When citing "the market multiple," always specify whether the benchmark is value-weighted (skewed toward mega-deals) or count-based (more representative of typical transactions).

AI premium. Companies with genuine AI capabilities trade at 30-50% premiums to peers, across software, semiconductors, and data infrastructure. Approximately 20% of global convertible bond issuance in 2025 was AI-linked, signaling the breadth of the theme.

PE dry powder deployment. Over $2 trillion in accumulated PE capital has created intense competition for quality assets, supporting multiples at the upper end of historical ranges. The number of mega buyouts more than doubled in 2025 versus 2024.

Rate stabilization. With the Federal Reserve guiding toward a terminal rate of 3.0-3.25%, both buyers and sellers have adjusted to the "new normal" of higher-but-stable rates. The bid-ask spread that paralyzed negotiations in 2023-2024 has largely evaporated.

Private credit growth. The expansion of private credit (now financing approximately 86% of LBOs by count, with the NAV lending market alone valued at $100 billion globally) has supported financial buyer affordability by providing an alternative to the syndicated loan market. Direct lenders offer speed, certainty, and flexibility that traditional bank-led syndications cannot match, though at a modest cost premium (100-200 bps wider spreads).

Defense and security. Geopolitical tensions (Ukraine, Taiwan Strait, Middle East) have driven a sustained increase in defense budgets across NATO countries, pushing aerospace and defense multiples to 16-18x, well above their historical 10-12x range. This repricing reflects the market's assessment that elevated defense spending is structural (multi-year budget commitments), not cyclical.

Healthcare consolidation continues. PE-backed healthcare services platforms continue to consolidate fragmented sub-sectors (dental, dermatology, ophthalmology, behavioral health), typically acquiring individual practices at 5-8x and building platforms valued at 12-18x. The multiple arbitrage between platform and add-on multiples remains one of the most reliable PE value creation strategies.