M&A activity snapshot
Deal volume in software and tech-enabled services is at a four-year high. PitchBook data compiled by R.L. Hulett shows 1,463 deals worldwide in Q2 2026, up 29.6% from 1,129 a year earlier. The same report puts 2026 on pace for 5,320 deals, up 19.8% from 4,442 in 2025. North America was the most active region, with 642 of the Q2 deals.
Most of this activity is small. Deals of $0 to $50 million made up 62.1% of first-half 2026 volume. That matches the shape of the U.S. market: Census counts 145,813 establishments in NAICS 5415, Computer Systems Design and Related Services, in 2023, and 106,750 of them have fewer than five employees.
Software is the largest single pool. Software Equity Group recorded a record 2,698 SaaS deals in 2025, with vertical software at 49% of them. Cybersecurity is the most contested services niche: Capstone Partners counted 466 cybersecurity transactions in 2024 and 79 in YTD 2026 through early May.
Demand behind the deals is growing. Gartner, as reported by CFO Dive, forecasts worldwide IT spending of $6.37 trillion in 2026, a 14.2% increase from 2025, driven largely by AI investment.
Who is buying
Private equity platforms. PE buyers accounted for 42.4% of software and tech-enabled services deal volume in 1H 2026, down from 45.5% in 2025. Across the broader middle market, add-on acquisitions were 58.2% of sponsor activity in 2025, and Capstone calls buy-and-build the industry's default operating framework. In managed IT services, Omdia found outside investors involved in 80% of MSP and MSSP deals in Q1 2026.
Strategic acquirers. R.L. Hulett attributes strategics' rising share to strong strategic appetite for AI-driven capabilities, alongside continued PE sponsor selectivity amid a higher rate environment. Public contractors buy specialized talent: Parsons acquired national-security IT and cybersecurity provider Altamira Technologies for $375 million, about 12.8x NTM EBITDA.
Global systems integrators moving down-market. Accenture launched a midmarket IT services unit called Accenture Edge in June 2026 and sizes that midmarket at a $240 billion addressable market.
Serial software acquirers, independent sponsors, and search funds compete for smaller vertical software and single-market IT services firms that sit below platform size. The vertical SaaS page covers the software buyers in detail.
What buyers look for
- Contracted recurring revenue. Founders Advisors' MSP scorecard ranks contracted recurring services highest, followed by resold subscriptions, consulting, and hardware. The same order holds across most tech services: project work and hardware resale are discounted.
- Security capability. Capstone reports that general cybersecurity service providers and MSSPs accounted for 59.5% of cybersecurity dealmaking in YTD 2026.
- Low AI displacement risk. SEG notes that SaaS acquirers favor purpose-built platforms and actively assess AI displacement risk. Services buyers ask the same question about routine help-desk and staffing work.
- Client mix that survives policy shifts. Capstone reports that government IT deal volume was flat at 81 transactions in YTD 2025 and platform investments fell 50%, after contract cancellations that mostly hit small-business IT providers.
What makes a strong company
Benchmarks vary by subsector, but the MSP scorecard from Founders Advisors is a useful reference for any recurring-revenue services firm. Its higher-value column is 80%+ recurring revenue, EBITDA margin above 20%, fully burdened gross margin above 50%, and 95%+ retention. It also flags a top customer above 20% of revenue as a concentration problem.
A company that commands a premium usually also shows:
- Multi-year contracts rather than month-to-month agreements.
- Documented processes and tooling that do not depend on the founder or one senior engineer.
- Audited compliance credentials where clients require them (SOC 2, HIPAA, CMMC readiness).
- A clear account of how AI changes its delivery cost and its clients' need for the service.
Valuation and deal structure
Published multiples come from disclosed deals, which skew large. Read them as upper reference points for a lower-middle-market business, not as a quote:
- Software and tech-enabled services, reported PE deals: median 3.0x EV/revenue and 15.2x EV/EBITDA in 1H 2026, versus 4.3x and 16.5x in 2025.
- SaaS: an average 6.9x trailing revenue in 2025, with the median clustered around 4.0x.
- Cybersecurity: an average 4.3x EV/revenue and 11.7x EV/EBITDA from 2025 through YTD 2026.
- MSPs with strong metrics: an observed 4x-12x+ EBITDA range since 2020.
- All-industry middle-market reference: an average 9.8x EV/EBITDA in 2025, per Capstone Partners.
Earnouts and seller rollover equity are common tools in PE platform deals, used to bridge valuation gaps. None of the sources above break out their usage for tech services, so treat that as a general market pattern rather than a sourced figure. To see where a specific business might land, use the valuation tool.
Subindustries
Technology deals split by business model: recurring-contract services, subscription software, and project or staffing work price very differently. Each page below covers its own buyers, benchmarks, and regulatory issues.