The Argos Index® by European investor Argus Fund showed a slight rebound in Q1 2026, rising 3.6 percent to 8.6x EBITDA after a prolonged decline that had brought it to its lowest level in over a decade.
This upturn was primarily driven by investment funds, whose multiples surged to 10.0x EBITDA, returning to H2 2025 levels, while strategic buyers remained stable at 7.8x EBITDA.
The divergence between these two groups reflects a selective, composition-driven rebound rather than a broad market recovery.
The distribution of transaction multiples also showed signs of normalization. The share of deals priced below 7.0x EBITDA declined to 22 percent, down from 27 percent in Q4 2025, while transactions above 15x EBITDA remained low at 6 percent.
This suggests an easing of the extreme pricing pressures seen in 2024-2025. However, the average EBITDA margin of acquired companies dropped to 12.6 percent, partly due to a higher share of cyclical and lower-margin sectors (energy, construction, transport) in the Q1 sample.
Despite the rebound, the macro-financial environment remained challenging. Long-term interest rates continued to rise, driven by concerns over sovereign debt sustainability and geopolitical instability, including the Iran conflict and US trade policy volatility. Against this backdrop, the Q1 2026 rebound appears more a result of PE sponsor activity and composition effects than a broad market improvement.
PE multiples surged to 10.0x EBITDA, up from 8.7x in Q4 2025, reflecting renewed appetite to deploy dry powder, improved financing availability, and a narrowing bid-ask spread.
PE activity was concentrated in healthcare, software, and B2B services, sectors that traditionally command higher multiples. European PE fundraising declined in 2025 due to a challenging exit environment, but alternative liquidity mechanisms (dividend recapitalizations, NAV financings) helped sponsors rebuild deployment capacity.
In contrast, strategic buyers maintained pricing discipline, with multiples stable at 7.8x EBITDA. The divergence between PE and strategic buyer multiples (now at 2.2x) highlights a composition effect: PE funds selectively re-entered the market for premium assets, while corporates continued broad-based activity across sectors.
Mid-market M&A activity declined 4 percent quarter-on-quarter in Q1 2026, though volumes remained 30 percent above Q1 2025. The decline in disclosed transaction value was more pronounced (-28%), but this metric is less meaningful due to low disclosure rates.
Globally, M&A reached a record 1.2 trillion dollars, with large-cap deals recovering faster than mid-market transactions.
