M&A Market Pulse 3Q25 – Part 1: Key Trends for Buyers and Sellers

By: Reizchel Oasay and Ron Buck

The M&A market is dynamic. The third quarter of 2025 revealed some noteworthy trends in business valuation, SDE multiples, and EBITDA multiples. The International Business Brokers Association (IBBA) and M&A Source recently released their latest market research. It is based on 247 transactions, providing valuable insights for both buyers and sellers.

Is it a Buyer’s or Seller’s Market? It Depends.

Market dynamics vary significantly depending on the business’s price range.  For example, the $500K-$1M segment is currently a buyer’s market, with 60% of respondents indicating this trend.

In contrast, businesses in the $1M – $100M range are generally experiencing a seller’s market, with percentages ranging from 58% for $1M-$2M businesses to 66% for those valued at $2M-$5M to 70% for $5M-$50M, and lastly, 64% for $50M-$100M.

Deal Timelines and Offers

The time to close an M&A deal can vary widely:

• $500K – $1M: Median closing time is 8 months.
• $1M – $2M: Median closing time is 9 months.
• $2M – $5M: Median closing time is 9 months.
• $5M – $50M: Median closing time is 10 months.

The number of offers received also fluctuates: businesses in the $500K-$2M range typically receive 2-3 offers, while those in the $2M-$50M range often receive 3-5.

Valuation Multiples in M&A: SDE and EBITDA

Key valuation metrics include Seller’s Discretionary Earnings (SDE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). The third quarter of 2025 saw some notable shifts:

• $500K – $1M: SDE remained 2.8x, and EBITDA increased from 2.0x (which was an anomaly) to 3.5x.
• $1M – $2M: SDE increased from 3.0x to 3.3x, and EBITDA decreased from 3.1x to 3.0x.
• $2M – $5M: SDE remained 3.3x, and EBITDA increased from 3.9x to 4.0x.
• $5M – $50M: SDE increased from 4.0x to 4.8x, but EBITDA decreased from 5.5x to 5.3x.

These changes highlight the importance of using industry-specific multiples and considering multiple valuation methodologies, as the mix and quality of businesses in the analysis can influence the quarter-to-quarter change.

• Buyers: Be aware of the competitive landscape in your target price range. A detailed analysis of valuation multiples for the specific industry you are looking at when making offers.
• Sellers: Price your business competitively. Be prepared for varying deal timelines and offer volumes based on your business’s value.

In Part 2, we’ll explore the motivations and demographics of buyers and sellers in the current M&A market.