Introduction

Mergers and acquisitions (M&A) are entering a new cycle in 2025. After several years of volatility — defined by pandemic disruptions, inflationary pressures, and shifting investor sentiment — the market is stabilising, but on very different terms than before. For founders in the mid-market space, this is both an opportunity and a challenge.

On one hand, private equity firms remain flush with dry powder, corporates are once again looking at acquisitions as a growth lever, and cross-border deal activity is picking up. On the other hand, valuation discipline has returned, buyers are scrutinising operations more than ever, and only the best-prepared companies will command strong terms.

For founders, the question is not simply whether deals will happen — they will. The real question is: what kind of companies will actually get bought in 2025, and at what price?

Strategic Buyers Are Back

One of the defining shifts of 2025 is the renewed activity of strategic buyers. Corporates, particularly in sectors like technology infrastructure, healthcare, and industrial innovation, are actively seeking acquisitions to plug capability gaps, accelerate innovation, or expand market share.

For founders, this means positioning their businesses as strategically accretive. It’s not enough to show revenue growth; you must clearly articulate how your product, talent, or market presence will strengthen a buyer’s existing platform. In many cases, smaller companies that align tightly with a corporate acquirer’s roadmap will outcompete larger, faster-growing peers that lack that strategic fit.

Valuation Discipline Defines the Market

The days of frothy multiples and inflated valuations are firmly behind us. In 2025, buyers — both private equity and corporate — are applying much stricter valuation frameworks.

Founders should expect investors to focus on sustainable EBITDA, recurring revenue, and defensible margins. Multiples in many sectors have compressed 20–30% compared to 2021 highs, and only businesses with exceptional fundamentals are able to break through that ceiling.

This does not mean opportunities are gone; rather, it rewards those who prepare early. Founders with realistic growth projections, clear cash flow visibility, and clean financials will not only attract more buyers but will also face smoother diligence processes and shorter deal cycles.

Operational Readiness: The New Dealbreaker

In 2025, operational readiness is no longer a detail — it’s the deciding factor. Buyers are conducting deeper due diligence across financial, legal, and operational dimensions, and any weakness can be grounds for walking away.

This means contracts must be watertight, customer data properly maintained, compliance frameworks robust, and internal systems scalable. Revenue concentration is a particularly sensitive area: businesses overly reliant on a small handful of clients face heightened risk, and buyers will push hard on valuation if concentration is above 30–40%.

Founders who proactively build resilience — diversifying revenue streams, formalising governance, and demonstrating process maturity — will emerge as stronger acquisition candidates.

Private Equity’s Selective Deployment

Private equity firms remain an active force in the mid-market, but their approach is evolving. With record levels of dry powder, these firms are highly motivated to deploy capital. However, in 2025, they are choosing quality over quantity.

This translates into fewer deals, but with larger commitments behind each. Funds are particularly attracted to companies that can serve as a platform investment — businesses with the infrastructure to acquire bolt-ons and scale rapidly post-investment. Founders who can demonstrate “buy-and-build” potential will find themselves in the strongest negotiating position.

Cross-Border Dynamics

Another trend shaping 2025 is the rise of cross-border dealmaking. Sovereign wealth funds in the Middle East and institutional investors in Asia are increasingly targeting European companies, particularly those in resilient or strategically important sectors.

For founders, this expands the buyer universe beyond local or regional players. However, cross-border deals come with heightened diligence around governance, cultural fit, and regulatory compliance. Preparing for this from the outset can create significant competitive advantage.

Conclusion

The M&A landscape in 2025 is neither frothy nor frozen — it is selective. For founders, this environment rewards fundamentals, preparation, and strategic clarity. Those who view M&A as more than a liquidity event, and instead as the culmination of disciplined execution, will not only secure stronger outcomes but will also build companies that attract the highest-quality buyers.

In short: the market is back, but only for the best-prepared.