Benelux technology M&A: Q2 2025 market update

Despite persistent geopolitical headwinds, the Benelux technology M&A market remained active in Q2 2025. CFI, in collaboration with Computable, tracked 127 transactions during the quarter, a slight decrease compared with 140 in Q1. While some processes were delayed, underlying appetite for quality assets remained robust, reflecting the structural importance of software and IT services in the region.

Geopolitics and market dynamics
Investor sentiment was weighed down by the prospect of an EU sanctions package in response to U.S. import tariffs under the Trump administration. Potential measures on cloud services in particular would have had direct consequences for IT service providers and created added complexity in ongoing M&A processes. Although an EU-U.S. trade agreement temporarily removed this risk, the mere threat of such policies continues to influence boardroom decision-making.

“It is not only the measures themselves, but also the resulting uncertainty for end customers,” notes Randy de Visser, Director in CFI’s Software & IT services team. “When investment decisions are delayed, IT service providers feel the impact immediately.”

Private Equity activity: exits, continuation funds and secondary buy-outs
Private equity sponsors were more active in Q2 following a subdued 2024. Platform add-ons remain the dominant driver of Benelux deal activity, while secondary buy-outs gained momentum, illustrated by Carlyle’s acquisition of SurePay from Iris Capital and Connected Capital.

Funds raised around 2019 are approaching the end of their investment cycle, implying an accelerated exit wave in 2025–2026. Given shorter holding periods in software and IT services compared to other sectors, sponsors are under pressure to crystallize returns.

Continuation funds are also becoming more prevalent. Main Capital’s €520m vehicle, raised in May, exemplifies how sponsors extend ownership of high-potential assets beyond traditional fund lifecycles. Proceeds are earmarked for further European expansion of SDB (NL, healthcare software), Mach (DE, public sector automation) and Björn Lundén (SE, accounting software). Main also executed landmark cross-border deals, including Trace One in France and Aritma/Documaster in Norway.

Technology & innovation as key valuation drivers
Generative AI and cybersecurity have emerged as core valuation drivers, with both financial sponsors and strategics seeking scalable solutions and secure cloud infrastructure. Companies integrated into the Microsoft ecosystem continue to command premiums due to recurring revenues and high customer stickiness.

“Buyers, particularly private equity, are increasingly focused on the scalability of AI and cybersecurity solutions. We expect this to be one of the dominant valuation drivers over the next 12–24 months,” says De Visser.

ESG & sustainability
ESG has shifted from optional to non-negotiable in M&A processes. Buyers are now systematically assessing carbon footprints, energy efficiency of datacenters, and EU compliance. SaaS solutions that facilitate ESG reporting are seeing growing strategic relevance.

Software companies enabling ESG reporting are increasingly valued as strategic enablers, with demand expected to rise further as regulation tightens. The convergence of digitalisation and sustainability is thus shaping both valuations and M&A strategies.

Venture Capital: a more cautious outlook
While venture activity in the Benelux remained muted due to interest rate uncertainty and cautious sentiment, select transactions highlighted the continued attractiveness of niche, scalable business models. Notable Q2 deals included Wuunder (logistics SaaS), Bash (event software), GoDutch (fintech) and Lleverage (automation software).

Investors continue to exercise discipline, with capital being allocated primarily to companies demonstrating strong unit economics and proven market traction. The expectation is that lower interest rates later in 2025 will help re-ignite broader venture and growth equity flows.

Sector consolidation: MSPs and B2B SaaS
Managed service providers (MSPs) and SaaS vendors remain at the forefront of consolidation. Riverdam-backed Smizer executed two acquisitions (Accensys and Infotune ICT), pursuing a roll-up strategy in the Dutch SME segment, and Avedon-backed Esprit ICT acquiring Matrix IT.

Centric broadened its software footprint with the acquisition of Twelve, a provider of POS and order management solutions for hospitality, museums, and sports venues. This move complements Centric’s strong retail position, while the simultaneous divestment of its Belgian staffing business to Planet Group highlights ongoing portfolio optimisation.

International interest remains high
Foreign appetite for Benelux IT assets remains strong, with acquirers from Germany, Scandinavia, the UK and the US particularly active. “There are still many attractive opportunities, and US buyers continue to view the Benelux as a key gateway to Europe,” observes De Visser.

Currency dynamics, however, are shifting. While a strong dollar made European assets more affordable in recent years, recent depreciation has made acquisitions more expensive in USD terms. This may result in greater selectivity and tougher negotiations, though strategic interest remains intact.

Outlook
Looking ahead, several dynamics are expected to shape activity in H2 2025:

• Monetary policy tailwinds: a potential rate cut in late 2025 could provide renewed momentum to both sponsor and strategic activity.
• Accelerating consolidation: MSPs and SaaS vendors face ongoing margin pressure and scaling needs, creating fertile ground for buy-and-build strategies.
• Exit cycle intensification: funds raised in 2019-2020 will need to deliver realisations, leading to heightened secondary buy-out and continuation fund activity.
• ESG and regulatory pressure: compliance with EU sustainability directives will become an increasingly critical factor in diligence and valuation.

Overall, while near-term uncertainty persists, the Benelux software and IT services market remains structurally attractive, underpinned by strong demand fundamentals, recurring business models, and international strategic interest.