Mid-market company valuations in the euro area continued to fall in the third quarter of 2025, with the Argos Index® dropping 5.4 percent to 8.7× EBITDA – its lowest point since early 2017.
The decline affected all segments, but the lower mid-market was hit hardest, with valuations down 10 percent. Nearly a third of deals were priced below 7× EBITDA, while transactions above 15× fell to a record-low share.
The ongoing slide comes despite a moderate rebound in M&A activity that began in 2024 and resumed after the brief disruption caused by the early-2025 U.S. tariff shock. Stable inflation, solid corporate earnings and optimism over AI-driven growth helped support dealmaking, but pricing remains pressured by higher long-term interest rates and tightening credit conditions – particularly in Germany – despite ECB rate cuts.
Both private equity funds and corporate buyers pulled back on valuations in Q3. Fund multiples fell 10 percent to 9.0× EBITDA, close to long-run norms, as weaker fundraising and pressure from LPs pushed sponsors to prioritize disciplined pricing.
Strategic buyers paid an average of 7.7× EBITDA, continuing their downward trend even as some sectors benefited from strong equity markets and AI-related transformation plays.
Extreme valuations were less common, with a record decline in deals above 15× EBITDA and a rise in lower-priced transactions. Meanwhile, euro-zone mid-market M&A activity stabilized after recovering in Q2, remaining broadly flat with 2024 levels but still about 20 percent above the 2020–2023 average. Ongoing geopolitical tensions, tariff uncertainty and domestic political risks, especially in France, continue to limit a stronger rebound.
Private equity activity tracked the broader market. While funds accounted for a steady 15 percent of deal volume over the past six months, they represented 30 percent of disclosed deal value, reflecting continued appetite for larger transactions despite tighter valuations.
