Market Update for Q3 2025
In our own SMB M&A transactions, we’ve seen a recent trend toward more of our clients transacting with strategic buyers. While the long-term average tends to be evenly split between strategic and financial buyers, all except one of our closed SMB transactions in 2025 so far have been with strategic buyers (some backed by private equity).
We also note a corresponding increase in valuations as these deals with strategic buyers are generally being priced at meaningfully higher Total Enterprise Value (TEV) / EBITDA multiples. This willingness by strategic buyers to pay higher prices is often due to anticipated cost and revenue synergies, unlocking of increased scale through acquisitions, and the buyers’ access to low-cost financing.
The current market feels balanced with a healthy level of deal activity and buyer interest. Various industries, including technology, financial services and industrial manufacturing / distribution, are experiencing increased deal volumes. Sectors with sensitivity to US tariffs or exposure to real estate / residential construction are finding M&A more challenging given current conditions. Overall announced Canadian transaction activity since the start of the 2025 is 14% lower than the same period in 2024 and remains below typical transaction volumes in previous years.
Canadian M&A Transactions by Quarter
After steadily climbing for two years, valuation multiples for North American private equity transactions in the US$10-25M range declined in Q2-25. This may be due to increased cross-border economic uncertainty but ultimately shows a return to the usual mean of ~6x TEV / EBITDA.
Average Enterprise Value / EBITDA for Private Equity Transactions (US$10-25mm)
News
In addition to advising on three closed sell-side transactions in Q3, our partners have spoken at various industry events including hosting Fort Capital’s ‘Exit Planning Essentials’ in Vancouver, joining an expert panel at MacKay CEO Forums executive breakfast on profitable growth strategies in Calgary, and speaking at Clark Wilson’s ‘How to Buy or Sell a Business’ seminar. We will also be presenting at the Business Transitions Forum in Vancouver next week.
Our team also participated in the recent ACG BC ‘State of the Markets’ event, the Waterstone MacKay Canada’s Most Admired Summit, and the Business Transitions Forum in Winnipeg.
About Fort Capital SMB Advisory
Fort Capital has skilled advisory professionals specifically dedicated to working with private companies on the sale of their small to medium size businesses (SMB’s). These transactions are typically valued between $5M and $50M. We combine the hands-on, bespoke work required to prepare a business for market with the benefits of scale. We leverage a large and growing network of credible, interested buyers across Canada and abroad to drive exceptional results for our private company clients.