Winter 2025 M&A Update
Middle market M&A activity weakened in the third quarter of 2025 showed signs of the typical late summer slowdown. Although the number of deals reported fell 20%, reported multiples increased 9% from 6.9x to 7.5x quarter-over-quarter. Similarly, deal value and transaction volume was up from the previous quarter, with total deal value reaching its highest level since the fourth quarter of 2024. The third quarter of 2025 experienced renewed activity in leveraged recapitalizations and growth financings, leading to larger, better-capitalized businesses able to support higher leverage levels.
Credit conditions continued to stiffen modestly as overall debt utilization decreased in the third quarter, bringing the year-to-date debt-to-EBITDA average down to 3.8x from 4.0x in the first half of 2025. Continuing a recent trend, lenders are demanding higher equity contributions and applying stricter underwriting standards, reflecting heightened borrowing costs and cautiousness.
Also in This Issue
U.S. Deal Value & Volume
EBITDA Multiples
EBITDA Multiples by Buyer Type
U.S. Deal Volume by Industry
Debt Multiples
Number of Deals by Buyer Type