Acquisition prices for European SMEs down further to 8.7x EBITDA, the lowest level since 2017
The mid-market Argos Index® for the third quarter of 2025 – published by Argos, the independent European investment fund, and Epsilon Research, the online platform for the management of unlisted M&A transactions – is now available. Launched in 2006, this index tracks the valuations of unlisted eurozone SMEs in which a majority stake has been acquired during the last six months.
“In the third quarter of 2025, acquisition prices for European SMEs fell to 8.7x EBITDA, the lowest level since 2017. Despite solid fundamentals – subdued inflation, robust corporate earnings and optimism about AI – the increase in long-term interest rates and higher term premiums pushed down valuations. The tension in the market reflects uncertainties about growth, geopolitical risks and fiscal risks in Europe. In addition, tighter credit conditions in the eurozone, and particularly in Germany, limited the use of leverage, reducing buyers’ ability to make acquisitions and increasing the downward pressure on SME prices,” said Louis Godron, Managing Partner at Argos.
Acquisition prices for unlisted European SMEs fell sharply (-5.4%) to 8.7x EBITDA, the weakest level seen since the first quarter of 2017, i.e. the lowest for 8 years and 9 months.
Median EV/EBITDA multiple on a six-month rolling basis – Source: mid-market Argos Index® / Epsilon Research
Prices paid fell in both broad buyer segments, i.e. among strategic buyers and funds.
- In the third quarter of 2025, valuations continued to decline, with multiples paid by investment funds falling by 10% to 9.0x and those paid by strategic buyers down again to 7.7x, a historically low level.
- Fund exits increased by 12.5% during the quarter.
- The drop in the Argos Index® reflects this repricing process and is helping M&A activity to recover.
The proportion of transactions at multiples of less than 7x EBITDA continued to rise.
- In the third quarter of 2025, the proportion of transactions taking place at extremely low multiples, i.e. less than 7x EBITDA, increased to 28%. This highlights persistent downward pressure on valuations.
- Meanwhile, the proportion of transactions taking place at multiples of more than 15x EBITDA fell to an all-time low of 7%.
There was a limited recovery in eurozone mid-market M&A activity.
- After falling in the first quarter of 2025, eurozone mid-market M&A began to recover in the second quarter (updated data) and then stabilised in the third.
- As a result, in the first nine months of the year, mid-market M&A activity in the eurozone was stable compared with the same period of 2024. It was 20% higher than the average level seen between 2020 and 2023. However, Europe is lagging behind the worldwide gradual recovery in M&A activity.
Argos
Coralie Cornet
[email protected]
+33 6 14 38 33 37
Argos / argos.fund – One business, two strategies. Argos is an independent European private-equity group that supports the growth of SMEs and mid-caps and their management teams. It has €2 billion in assets under management and 35 years of experience, has supported more than 100 companies so far, and operates from offices in Amsterdam, Brussels, Frankfurt, Geneva, Luxembourg, Milan and Paris. The group seeks to acquire majority interests and invests between €10 million and €100 million per investment via its two strategies:
- The Argos Mid-Market fund unleashes companies’ potential and helps them move to the next phase of their development.
- The Argos Climate Action fund (SFDR 9) aims to shape sustainable European leaders by facilitating their grey-to-green transition.
Epsilon Research has developed the leading professional online platform for the management of unlisted M&A transactions. The platform includes data, analysis reports, software tools and services that are essential for evaluating and managing unlisted investments: The EMAT database of European transaction multiples, with detailed analysis of over 10,000 M&A deals covering all industry sectors; indices and studies published regularly by Epsilon, including the Argos Index®; a tool for evaluating the portfolios of private equity funds; cloud-based M&A CRM and project management software; and an online dataroom for SME transactions.
The mid-market Argos Index® tracks valuations of unlisted mid-market companies in the eurozone. Compiled by Argos and Epsilon Research and published every three months, it shows the median EV/EBITDA multiple, on a six-month rolling basis, of transactions that meet the following criteria: mid-market deal (100% equity value between €15 million and €500 million), target based in a eurozone country, acquisition of a majority stake, and certain activities excluded (financial services, real estate, high tech).
