Valuation Multiples Reset: Sector Analysis and Transaction Implications
bIAnk AI Research · November 2025 · 7 min
EV/EBITDA multiples have normalized from 2021 peaks across most sectors. Understanding the new valuation landscape is essential for realistic deal expectations.
After the valuation excesses of 2021, M&A multiples have undergone a significant reset. EY's M&A activity insights show that average EV/EBITDA multiples for mid-market transactions have declined from 12.5x in 2021 to approximately 9.5x in 2025, representing a more sustainable baseline.
The reset has not been uniform across sectors. Technology multiples have compressed the most, with software companies now trading at 8-12x revenue versus 15-25x at the 2021 peak. However, AI-enabled businesses and those with clear paths to profitability continue to command premiums.
Healthcare and life sciences have shown relative resilience, with biopharma M&A multiples remaining elevated due to pipeline value and patent cliff pressures. J.P. Morgan's biopharma deal report notes that acquisition premiums for innovative therapeutics average 75-100% over undisturbed trading prices.
Industrial and manufacturing sectors have seen the most stability in valuations, reflecting consistent fundamentals and less speculative activity during the 2021 boom. Infrastructure assets continue to attract premium multiples given yield scarcity and energy transition tailwinds.
For dealmakers, the valuation reset creates opportunities. Buyer-friendly conditions prevail in sectors with realistic seller expectations. The key challenge is bridging gaps where sellers anchor to historical peaks while buyers price current market conditions.
Key takeaways
- Average EV/EBITDA multiples down from 12.5x (2021) to 9.5x (2025)
- Technology sector saw largest compression; AI and profitable tech retain premiums
- Healthcare M&A multiples remain elevated due to pipeline value
- Valuation reset creates buyer-friendly conditions in realistic sectors