Q1 2026

GovTech M&A Update

In Q1, the North American Technology Software Industry Index decreased by 22.3%, outperforming the S&P 500 which saw a 4.8% decrease over the same period.
The median EV/Revenue multiple for reported private equity deals in the GovTech sector decreased to 2.8x in Q1 from 11.4x in 2025, but increased for strategic deals to 6.6x from 4.5x in 2025.
M&A deal volume in the sector increased 10.0% in Q1 to 110 deals from 100 in Q4 2025, and increased 34.1% from 82 deals in Q1 of the prior year.
North America was the most active region in Q1 with 58 deals. Most notable in North America was Palo Alto Network’s $26.2 billion acquisition of CyberArk Software, a Massachusetts-based cybersecurity provider in the personal identity market.
Total capital invested in M&A transactions sharply increased 308.8% in Q1 to $46.6B from $11.4B in Q4 due primarily to the CyberArk Software deal mentioned above. Comparatively, the largest deal reported in Q4 was Salesforce’s $8.0B acquisition of Informatica.