Mid-market Argos Index® for the first quarter of 2025
Acquisition prices for European SMEs down to 9.5x EBITDA against a backdrop of weaker M&A activity
The mid-market Argos Index® for the first quarter of 2025 – published by Argos Wityu, 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.
“Growing uncertainty regarding the economic and trade policies of the US administration caused the recovery in the eurozone mid-market to stall, reduced M&A activity and increased market volatility. Despite lower borrowing costs, expectations of further ECB rate cuts, easier access to funding and inflation falling close to the 2% target, the decline in valuations for eurozone SMEs in the first quarter of 2025 reflects widespread concern, with optimistic forecasts now a thing of the past,” said Louis Godron, Chair of Argos Wityu.
Acquisition multiples for unlisted European SMEs fell to 9.5x EBITDA in Q1.
Median EV/EBITDA multiple on a six-month rolling basis – Source: Mid-market Argos Index® / Epsilon Research
- In the first quarter of 2025, the Argos Index® fell by 3% to 9.5x EBITDA. That decline ended the recovery in mid-market eurozone prices that had begun in 2024, and resulted from lower M&A activity during the quarter.
The Argos Index® was driven lower by both investment funds and strategic buyers across the whole mid-market.
- In the first quarter of 2025, multiples paid by investment funds were down 3% to 10.0x EBITDA. The decrease came against a backdrop in which private equity investment fell in 2024 for the first time in two decades , with funds under pressure to sell assets and return cash to their backers.
Multiples paid by strategic buyers fell slightly to 9.2x EBITDA. - Stockmarket volatility resulting from the threat of US tariffs made price negotiations more difficult. However, the impact remained limited because of the ongoing improvement in financial health and the interest shown by large corporations in making transformative acquisitions.
- Although the gap between multiples paid by investment funds and strategic buyers narrowed to 0.8x EBITDA during the quarter, it remained significant, in line with its average since 2021.
Ongoing decline in transactions taking place at extreme multiples.
- In the first quarter of 2025, 32% of transactions took place at extreme multiples, i.e. less than 7x or more than 15x EBITDA, which is the smallest proportion since Covid. The terms of M&A deals started to return to normal in 2024, despite the recent economic turbulence.
- Transactions at multiples of less than 7x EBITDA accounted for 23% of the transactions analyzed, slightly higher than in the previous quarter and emphasizing the downward pressure on prices.
- The proportion of transactions at multiples of more than 15x EBITDA fell to 9%.
Sharp fall in mid-market M&A activity.
- Mid-market M&A activity in the eurozone fell by 20% in volume terms and 35% in value terms compared with the fourth quarter of 2024.
- That trend was in line with the sharp decline in the global M&A market, where the number of transactions was the lowest in 10 years, falling by 30% relative to the first quarter of 2024 and 44% compared with the market peak in 2021.
(1) Private equity assets under management fell by 2% in 2024 and there was over $3tn backlog of unsold companies according to Bain Global Private Equity Report 2025 (in the FT, 06.03.2025).
Argos Wityu
Coralie Cornet
[email protected]
+33 6 14 38 33 37
Argos Wityu – One company, two strategies.
Argos Wityu 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 deal via its two strategies:
- The Argos Mid-Market fund helps companies arrange changes of ownership in order to accelerate growth.
- The Argos Climate Action (SFDR article 9) fund 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 Wityu 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, certain activities excluded (financial services, real estate, high tech).
