Key highlights:

 M&A volume rose 14% year-over-year in Q3 2025, one of the strongest quarters in recent years 

Scale continues to command value, TEV tiers showed a clear gradient from 5.8x ($10–25MM) to 9x+ (>$250MM), with a broad market average of 6.7x EBITDA.

 Key sub-industries posted strong performance, including Construction Machinery at 7.6x and Industrial Machinery at 6.5x 

 Leverage levels remain disciplined, with Total Debt/EBITDA at 3.8–4.0x, down from peak 2021–2022 levels

 On the terms and conditions from indemnification caps edged to ~14% of TEV

What’s driving the momentum?

Buyers continue to prioritize high-quality, scalable industrial businesses, especially those with recurring revenue, strong management teams, and technology-enabled processes. Add-on acquisitions are now trading at higher multiples than platforms, underscoring strong sponsor demand.

Our take:

The market remains highly favorable for owners planning growth, recapitalization, or liquidity in 2026. Companies investing in automation, supply chain modernization, and operational excellence are positioned to outperform.

If you’d like a copy of the full Q3/Q4 Industrials & Manufacturing Report, or to discuss what this means for your business, our team at Westlake Securities is here to help. See below for helpful links the comments. 

If you’re considering strategic options for your company in 2026, now is the time to engage. Our team is actively advising founders, CEOs, and investors on market timing, valuations, and capitalization strategies.

Source: GF DATA