GovTech M&A Update

RESOURCE HIGHLIGHTS

• In Q2, the North American Technology Software Industry Index increased by 21.6% and outperformed the S&P 500, which increased by 10.2% over the same period.
• The median EV/Revenue multiple for reported private equity deals in the GovTech sector increased to 11.4x in 1H from 6.0x in 2024, but decreased for strategic deals to 4.2x from 4.9x in the prior year.
• M&A deal volume in the sector increased 20.7% in Q2 to 99 deals from 82 in Q1 2025, but decreased 4.8% from 104 deals in Q2 of the prior year.
• As a % of total capital invested in M&A transactions, PE participation increased significantly in 1H to 63.9% from 35.4% in 2024.
• North America was the most active region in Q2 with 46 deals. Most notably in North America was AeroVironment’s acquisition of BlueHalo, a Virginia-based provider of advanced defense technologies including autonomous systems and missile defense solutions, for $4.1 billion, in May 2025.