Huntington’s Capstone Sees 21.2% Q1 Deal Value Surge, 9.8x EBITDA
Huntington’s Capstone Partners reported that middle market deal values climbed 21.2% year-over-year in Q1 2025 and merger volume rose 10.3% after a 15.8% decline a year earlier. Average EV/EBITDA multiples reached 9.8x in 2025, up from 9.4x in 2024, with advisors forecasting further multiple stability.
1. Q1 2025 Dealmaking Uptick
Capstone Partners reported that middle market M&A volume rose 10.3% year-over-year in Q1 2025, reversing a 15.8% decline in the same period of 2024. Deal values jumped 21.2%, reflecting renewed buyer confidence following earlier macroeconomic disruptions.
2. 2025 Valuation Gains by Sector
Average middle market EV/EBITDA purchase multiples increased to 9.8x in 2025, compared to 9.4x in 2024 and 9.0x in 2023. Aerospace, defense, government & security, business services, energy, technology, media & telecom, and high-margin agriculture assets posted notable multiple improvements.
3. 2026 Outlook and Advisor Predictions
In a survey of investment bankers, 27.4% anticipate M&A multiples will rise in 2026, while 66% expect little change. Forecasted average multiples for typical and premium transactions are 6.8x and 9.8x EV/EBITDA, suggesting stable advisory pipelines.
4. Private Equity Shift in Deal Structures
Private equity add-on acquisitions comprised 58.2% of sponsor activity in 2025, down from 61.3% in 2024, as leverage dropped from 6.2x to 3.4x net debt-to-EBITDA. Interest coverage weakened to 2.9x from 6.0x, indicating higher debt servicing costs amid lower leverage levels.