Fort Capital SMB Market Update 2025 Year In Review

With 2025 completed, the Fort Capital SMB Advisory team is pleased to share our thoughts on the Canadian SMB M&A deal environment over the last year along with our outlook for 2026.

2025 In Review

Overall, M&A transaction activity in Canada declined by approximately 15% in 2025 (source: Capital IQ), reflecting a year of geopolitical and economic uncertainty. While our team experienced a slowdown in new mandates between April and October, we continued to advance several live transactions and ultimately closed the year with a record number of successful deal completions.

Over the past year, the mix of counterparties in our transactions shifted meaningfully toward strategic buyers (including private equity-backed strategics), compared to a long-term average of roughly 50% strategic and 50% financial sponsors. More broadly and anecdotally, private equity firms completed fewer new platform acquisitions in 2025, instead prioritizing add-on acquisitions within existing portfolios.

We also observed that while banks remain supportive of transactions for valued acquiror relationships, financing processes have become more rigorous, with increased diligence requirements and longer approval timelines.

Valuations for private company M&A remained relatively stable in 2025, with industry averages for North American lower middle-market buyout transactions holding at approximately 6.4x Total Enterprise Value / EBITDA in both 2024 and 2025 (source: GF Data; TEV US$10–25M).

Encouragingly, several of our sell-side clients achieved exceptional outcomes in 2025, realizing valuation multiples well above industry averages. This was driven primarily by strong strategic buyer interest with clear synergy potential and their access to attractive financing.

Fort Capital SMB Advisory Team Updates

On a firm level, we were pleased to welcome Hugh Notman in Vancouver and Othello Tuason (OT) in Calgary to the Fort Capital SMB Advisory team, strengthening our presence in key Western Canadian markets.

Throughout the year, we remained active across the business owner and advisor community, participating in MacKay CEO Forums, Business Transitions Forums, Association for Corporate Growth (ACG) events, M&A Club meetings, and by hosting our own Exit Planning Essentials seminars.

Fort Capital SMB Advisory Transactions

We are pleased and honoured to have assisted our SMB clients with the following transactions that closed in 2025:

Fort Capital Partners SMB Advisory 2025 Feature Transactions

Outlook for 2026

After a slowdown in new mandates through the spring and summer of 2025, we experienced a meaningful pickup in activity beginning in the fall, with an increasing number of business owners initiating conversations around potential sale and M&A processes. We have entered 2026 in the early stages of several transactions, which should keep the team active through at least the first half of the year.

Overall, we are constructive on the near-term M&A environment. While tariff-related uncertainty and ongoing CUSMA considerations continue to impact business confidence, many Canadian companies are delivering strong financial performance, which provides a solid foundation for quality M&A activity.

Over the longer term, demographic trends – particularly the aging of Canada’s business owner population – remain a powerful structural driver of deal volume in the SMB market. At the same time, continued demand from strategic acquirors and private capital providers should help support attractive valuations for well-positioned businesses.

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.