The M&A market for agencies, consultancies, and tech services continues to confound optimists and cynics alike. There’s evidence to support both of these mindsets, but one belief they have in common is that M&A is changing: It’s no longer just about scale, but about adaptability and future-proofing.
Buyers are less dazzled by historic growth and more interested in defensible, differentiated capabilities. The flood of AI tools and the shift away from cookie-based targeting have fundamentally changed acquisition criteria. In 2025, strategic buyers want agencies that can prove real expertise in proprietary data, owned audience, and AI-driven analytics—not just “buzzword compliance.”
The acquisition of Lotame by Publicis is a case in point: the value wasn’t just in client lists or revenues, but in access to unique first-party data infrastructure and an R&D pipeline in AI-fuelled identity resolution. This is a clear signal: future deal premiums will accrue to those building assets that solve the privacy–performance conundrum, not just those with scale or legacy client relationships.
The mid-market is also telling a new story. LDC’s successful sale of Blis to T-Mobile and its investment in Precise TV, reflect a flight to clarity and conviction. PE investors are pivoting away from complex, multi-line roll-ups in favour of focused bets with proven go-to-market strategies. That’s a trend which is reflected in SI’s latest PE Insights report, which shows that bolt-on activity collapsed in 2024, with few signs of recovery so far.
That means more deals for specialist agencies—particularly in commerce, performance media, and influencer marketing—while “generalists” are facing fewer buyers and stagnant multiples.
On cross-border activity, the mood is less exuberant than it was a few short months ago, with anxiety around US and global economic confidence. While there’s no clear evidence yet of a fall in demand from US acquirers, the tariff turbulence and a softer dollar are potential headwinds, and many are watching for signs that American buyers may become more inwardly-focused.
Financing is the joker in the pack. Yes, lower and mid-market funds have raised huge sums that need to be deployed. But they’re anxious in a highly unpredictable market, and due diligence is at “deep tissue” levels. The best-prepared sellers—those who can demonstrate resilience, a well-substantiated growth plan, and bulletproof diligence —are achieving the fastest completions and best terms.
At the top end of the market, the anticipated IPO rebound, which was due to provide exit routes for the largest PE-backed groups, is very much on hold. We expect some of those groups to return to strategic M&A, to keep building shareholder value while they wait for the next window of opportunity.
Looking ahead, any predictions come with a major asterisk: geopolitics is moving so fast that forecasting more than a month out feels increasingly speculative. That said, business leaders and investors are showing signs of becoming desensitised to the noise. The AI revolution continues apace and there is still real desire from both buyers and sellers to push ahead with strategic plans, even in a less predictable environment.
In short: the M&A market remains very active, especially for small to medium sized targets, but the rules of the game are evolving. Adaptation and agility will matter more than ever as 2025 unfolds.