Industry Trends
M&A transaction volumes in the Business Services sector moderated in Q3 2025, as investors maintained a selective approach amid ongoing macroeconomic and regulatory uncertainty.
Activity remained resilient in Consulting & IT Services and Environmental & Facility Services, supported by strong demand for tech-enabled solutions, digital transformation, and efficiency-driven platforms.
The market continued to favor high-growth, defensible segments such as AI-driven tools, data & analytics, and risk advisory, highlighting investor preference for scalable, technology-oriented models despite a softer overall M&A environment.
Market Dynamics
- Environmental & Facility Services firms remained resilient in Q3, with consolidation activity supported by stable demand and continued regulatory flexibility, though valuation momentum eased modestly from earlier highs.
- IT Services sustained growth in Q3 2025, underpinned by digital infrastructure investment, cloud migration, and AI adoption, though multiples normalized after peaking mid-quarter.
- Consulting demand held firm in Q3, driven by enterprise transformation and regulatory alignment initiatives, with cybersecurity and ESG compliance continuing to underpin client priorities.
- Real Estate Services showed measured stabilization in Q3 2025, as easing financial conditions provided support, though elevated interest rates and policy uncertainty remain key overhangs.
- Insurance providers faced ongoing margin pressure in Q3, with rising claims costs and litigation trends sustaining premium increases, while valuations compressed further relative to the sector.
- Staffing firms in Q3 accelerated automation and hybrid workforce adoption, but multiples reflected persistent macroeconomic and regulatory headwinds.
Contacts
Reach out to Dinan Capital Advisors Managing Director Will Downing for more report insights.