Key Takeaways:
- Private company valuations remained stable but pressured in 2025: EBITDA multiples declined modestly, while revenue multiples showed mid-year volatility before rebounding.
- Valuation outcomes varied significantly by industry: Sector performance diverged, with certain industries seeing strong gains while others experienced notable declines.
- Preparation and positioning drive valuation outcomes: Buyers continue to reward companies with strong margins, recurring revenue, and scalable operations, making strategic planning critical.
In our March 2025 M&A trend update, we noted that heightened uncertainty surrounding the Presidential election had a greater‑than‑anticipated dampening effect on the economy and deal activity during the fourth quarter of 2024. At that time, many transactions were delayed as market participants waited for greater clarity around economic policy, interest rates, and the broader business environment.
That trend continued through 2025, as dealmakers navigated an evolving economic and political landscape. While uncertainty has been a persistent theme over the past several years, the election cycle introduced an additional layer of hesitation for buyers and sellers alike.
With a full year of additional data now available, it’s worth revisiting the private company M&A landscape to assess how the deal environment evolved as that uncertainty worked its way through the market. Did transaction multiples recover as confidence improved or did pressure on pricing persist?
This article provides a summary of valuation trends for private companies using data from the DealStats Value Index for Q4 2025, with a focus on EBITDA and revenue multiples.
M&A Trends for Q4 2025
Transaction multiples offer a useful lens for understanding how private company deal activity adjusted throughout 2025. From Q1 2025 through Q4 2025, EBITDA multiples reflected a modest but noticeable decline across the market following a brief rebound earlier in the year.
The median selling price per EBITDA across all industries fluctuated from 3.5x at Q4 2024 to 3.7x at Q1 2025, 3.8x at Q2 2025, 3.7x at Q3 2025, and 3.5x at Q4 2025. While this trend suggests a relatively stable valuation environment overall, it also highlights that the early year recovery in multiples was not sustained through year‑end.
Importantly, EBITDA multiples continued to vary significantly by industry. Over the past twelve months, the information sector generated the highest median selling price per EBITDA at 14.6x, followed by finance and insurance at 11.5x. At the lower end of the spectrum, the arts, entertainment, and recreation sector posted the lowest median EBITDA multiple at 2.6x, with accommodation and food services close behind at 2.9x.
The table below illustrates the median selling price per EBITDA by industry for private companies.
Revenue Multiples Show Volatility in 2025
In addition to EBITDA multiples, revenue‑based valuation metrics provide further insight, particularly for companies where profitability may fluctuate or where growth remains a primary driver of value.
The median selling price per net sales for private companies experienced notable volatility during 2025. Multiples began the year at 0.60x in Q1 2025 and declined to 0.57x in Q2 2025 and 0.53x in Q3 2025 before rebounding to 0.62x by Q4 2025. This pattern suggests that while pricing pressure emerged mid‑year, buyer confidence strengthened toward the end of 2025, particularly for businesses demonstrating stable or improving performance.
The table below illustrates the median selling price per net sales for private companies.
Sector‑Level Trends in Revenue Multiples
Looking beyond aggregate figures, sector‑level data reveals meaningful divergence in how revenue multiples evolved during the year. Median net sales multiples decreased in 7 of the 15 industry sectors in 2025, underscoring that valuation outcomes were far from uniform.
The arts, entertainment, and recreation sector and the information sector experienced notable declines of 17% and 22%, respectively. In contrast, the professional, scientific, and technical services sector stood out with a notable increase of 16%, reflecting continued buyer interest in businesses with specialized expertise, recurring revenue streams, and scalable service models.
The following table illustrates the median selling price per net sales by sector for private companies.
EBITDA Multiples by Sector
A similar pattern of dispersion emerges when examining EBITDA multiples at the sector level. Median EBITDA multiples increased in 6 of the 15 industry sectors during 2025, despite the modest decline observed in overall market medians.
The most notable gains occurred in finance and insurance, which experienced a 34% increase, and healthcare and social assistance, which posted a 14% increase. These increases suggest that buyers continue to place a premium on industries viewed as resilient, regulated, or positioned for long‑term demand growth.
The following table illustrates the median selling price per EBITDA by sector for private companies.
What Does This Mean for Your Business?
Transaction multiples do not move in isolation. They reflect a combination of macroeconomic conditions, industry‑specific dynamics, buyer expectations, and company‑specific performance. As the 2025 data demonstrates, even in a relatively stable deal environment, transaction outcomes can vary significantly depending on sector, profitability profile, and growth characteristics.
Turning Market Insight into Strategic Advantage
For business owners this dispersion highlights the importance of understanding not only overall market trends, but how those trends apply within your specific industry. A modest decline in median multiples doesn’t necessarily signal weaker outcomes for well‑positioned companies. Buyers continue to differentiate aggressively, rewarding businesses with recurring revenue, strong margins, defensible market positions, and scalable operations.
These trends also underscore the value of preparation. Whether you’re considering a near‑term transaction or planning several years ahead, benchmarking your company’s financial performance against market data can help inform strategic decisions around investment, cost structure, growth initiatives, and timing. In many cases, incremental improvements in profitability, revenue mix, or operational discipline can have an outsized impact on valuation.
Ultimately, staying informed about M&A valuation trends can help business owners and executives make more confident, data‑driven decisions—whether that means pursuing a sale, seeking investment, evaluating strategic alternatives, or simply ensuring the business is positioned to capitalize on future opportunities.
Have questions or want to explore your options? Contact us to discuss how these insights may impact your valuation and transaction strategy.