Q3 2025

GovTech M&A Update

In Q3, the North American Technology Software Industry Index increased by 5.9%, but was outperformed by the S&P, which increased by 7.9% over the same period.
The median EV/Revenue multiple for reported private equity deals in the GovTech sector increased to 11.4x in YTD 2025 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 decreased 17.2% in Q3 to 82 deals from 99 in Q2 2025 and decreased 24.1% from 108 deals in Q3 of the prior year.
As a % of total capital invested in M&A transactions, PE participation increased significantly in YTD 2025 to 66.1% from 35.4% in 2024.
North America was the most active region in Q3 with 36 deals. Most notably in North America was Vista Equity Partners’ $2.0 billion acquisition of Acumatica, a Washington-based developer of cloud-based enterprise resource planning software, in July 2025.