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Main Conclusions
- 1. The Argos Index® continued its downward trend, reaching 8.3x EBITDA, its lowest level since 2014.
- 2. The Argos Index® is pulled down by the multiples drop of larger deals and by investment funds.
- 3. The share of deals priced below 7.0x EBITDA stabilized at a high 27%, and those above 15x at a record‑low 7%, underscoring persistent downward pressure on pricing.
- 4. Mid-market M&A activity accelerated toward year-end, supported by lower valuations and improved alignment between buyers’ and sellers’ price expectations.
- 5. Renewed activity on lower prices usually characterizes a market bottom.
The Argos Index® continues its downward trend
to 8.3x EBITDA, back to its 2014 level
The Argos Index® declined by a further 4.6% in Q4 2025 to 8.3x EBITDA, from 8.7x in Q3, reaching its lowest level since H1 2014. This decline was primarily driven by a sharp correction in the upper mid-market, where multiples fell by 22%, while valuations at the lower end of the market stabilized.
Downward pressure on pricing remained pronounced. The share of transactions priced below 7.0x EBITDA stayed at a record high of 27%, while deals above 15x EBITDA accounted for a record-low 7% of the sample, broadly unchanged from the previous quarter. This confirms a structurally more cautious pricing environment, with limited appetite for high-multiple transactions.
Pricing remained constrained by the macro-financial backdrop. Rising long-term interest rates(1) offset the impact of ECB policy rate cuts(2), with elevated term premia reflecting growing concerns over financial stability. Record sovereign debt levels, heightened geopolitical tensions, and uncertainty stemming from Donald Trump’s unpredictable policies—including pressure on Fed independence and its implications for the dollar—continued to weigh on investor confidence and valuation assumptions.
Despite the troubled context, Mid-market M&A activity recovered meaningfully in H2 2025, with deal volumes up 30% versus H1 and 8% year-on-year. This rebound was supported by stronger-than-expected euro-zone fundamentals—controlled inflation, improving economic growth and corporate earnings—as well as the region’s resilience in the face of aggressive U.S. trade policies. In addition, vendors progressively adjusted price expectations to the new market reality, helping to unlock stalled transactions and support deal flow.
(1) The 10y EU bond yields, calculated by the ECB, was up 6bp in Q4 (from 3.15% to 3.21%)
(2) ECB cut interest rates by more than 2 percentage points in 18 months (from 4.25% to 2.15%)
Argos Index® mid-market
Median EV/EBITDA multiple on a six-month rolling basis
Source : Argos Index© mid-market / Epsilon Research
The Argos Index® is pulled down
by investment funds
Multiples paid by investment funds declined further to 8.7x EBITDA in Q4, reflecting continued downward pressure as lenders and buyers remained cautious on leverage levels amid ongoing macroeconomic uncertainty. However mid-market LBO volumes rebounded strongly in H2 (+30%), in line with the broader M&A market. Steady financing availability supported LBO pipelines into year-end, while valuation gaps between buyers and sellers narrowed as prices continued to adjust downward.
In 2025, European private equity fundraising declined year-on-year(1), reflecting a challenging exit environment for legacy portfolios. While PE funds increasingly turned to alternative liquidity solutions such as dividend recapitalizations, NAV financings, minority sales, or continuation vehicles, mid-market exit activity regained momentum in H2, with volumes rising by 36%.
Multiples paid by strategic buyers stabilized at a low 7.7x EBITDA in Q4. While overall deal flow has gradually recovered, they have adjusted to ongoing macroeconomic and geopolitical headwinds. Their activity increasingly focused on targeted, value-accretive acquisitions—particularly in technology, digital, business services, and other resilient sectors—executed at lower multiples, with a record share of transactions priced below 7.0x EBITDA. At the same time, the sustained rally in public equity markets since early 2025(2) continued to support high‑premium strategic transactions, as corporates reshape their portfolios via divestitures and strategic asset sales.
(1) European private equity fund raising was down 45% in 2025 to €80.8bn, from €146.7bn (source: Pitchbook), though dry powder for private equity sponsors was still at a high €434.8bn (Source: CapitalIQ)
(2) The EURO STOXX TMI Small Index is up 3.7% in Q4 and 22.8% since 1st Jan. 2025
Enterprise value / historical EBITDA
Source : Argos Index© mid-market / Epsilon Research
Record lows of transactions above 15x EBITDA
In Q4 2025, transactions at the extremes accounted for 34% of the index sample, in line with the last quarter, reflecting a record‑low share of >15x deals alongside a high proportion of low‑end transactions priced below 7.0x EBITDA
Share of transactions at extreme multiples (15x EBITDA)
Source : Argos Index© mid-market / Epsilon Research
Share of transactions at multiples >15x EBITDA Argos Index® sample
Transactions priced below 7.0x EBITDA account for 27% of the sample, highlighting persistent downward pressure on valuations.
Share of transactions at multiples 15x EBITDA Argos Index® sample
The M&A mid-market activity accelerated
at year end
Euro‑zone mid‑market M&A activity showed a clear improvement in H2 2025, with deal volume rising by 30% compared to H1, and the estimated number of transactions exceeding 500—the highest level since H2 2018. For the full year, deal volume increased by 8% versus 2024, underpinned by lower transaction prices and a gradual improvement in market sentiment.
The euro‑zone M&A market benefited from stronger fundamentals: better-than-expected economic growth(1), easing inflation, and a more accommodative monetary environment that supported financing conditions. The region demonstrated resilience in the face of Donald Trump’s aggressive trade policies and adventurous foreign policy.
However, the euro‑zone recovery lagged the global M&A market, where overall deal value increased 48% in 2025(2). Geopolitical risk, high energy prices, and France’s unusual political situation continue to weigh on the activity. In H2, mid-market M&A volume growth was lower in France (+8%) than in other euro‑zone markets: Germany (+25%), Italy (+43%), Spain‑Portugal (+42%), and other euro‑zone countries (+71%).
(1) In 2025, GDP increased by 1.5% in the euro area (vs. +1.3% expected by the European Commission), and by 0.3% in Q4.
(2) M&A activity grew 48% to $4.58tn according to LSEG, in Les Echos, 05.01.2026
Eurozone mid-market activity (€15–500m) in volume (# deals) and value
Source : Argos Index© mid-market / Epsilon Research
Eurozone mid-market activity (€15–500m) in volume and value
Investment fund activity growth was in line with the broader M&A market. Their share(1) of mid-market M&A in H2 remained stable at 15% in deal count – a very stable market share since 2022.
(1) Does not include build-ups
Share of LBO in Eurozone Mid-market M&A
