Q1 Insights from our Sector Heads

We are pleased to share our Q1 2025 sector insights, drawing directly from our work in the market and our sector heads' latest observations.

As Q1 unfolds, dealmakers are navigating a complex and evolving landscape shaped by macroeconomic pressures, regional policy shifts, and evolving investor expectations. While uncertainty lingers in parts of the market, there is also clear evidence of activity - especially in resilient sectors where demand fundamentals remain strong.

At MCF, we are experiencing strong momentum, having announced 12 deals in Q1 alone. This reflects continued investor appetite for high-quality assets with strong fundamentals and clear growth potential.

While broader M&A sentiment remains mixed, investors continue to pursue opportunities where resilience, growth potential, and strategic relevance align. Below, we highlight how these dynamics are playing out across our four core verticals: Business Services, Consumer, Industrials, and Technology.

Business Services

We had expected to see M&A volumes rebounding over the last quarter; unfortunately, weaker current trading and geopolitical uncertainty dampened deal activity. This holds especially true for larger deals and private equity-owned assets, where we have seen multiple situations either go quiet or be postponed to 2026 in the hope of stronger trading performance and stability.

Resilient niche market segments remain attractive to strategic and private equity buyers. Companies operating in such sectors continue to fetch healthy multiple valuations across the cycle. In particular, those exposed to infrastructure budgets and defence spending are drawing increased interest - an area we remain highly active in. A recent example includes IK Partners’ acquisition of water protection and purification specialist Tecomatic.

Nils Petter Palmefors

Consumer

In the first quarter of 2025, European mid-market consumer M&A showed signs of recovery, building on the momentum from Q4 2024. The initial part of the quarter was buoyed by improving and stabilising macroeconomic conditions across Europe, which also shaped a more positive outlook for the remainder of the year.

During this period, we advised Jordanes on the sale of Lindvalls Chark, Sweden’s premier sausage producer, to Scan Sverige, a business area of Lantmännen. In addition, we advised BLACKROLL AG, a leading company in the active and passive recovery space, on a management buy-out to KKA Partners. 

Looking forward, we expect continued strong activity in the consumer sector. While food and beverage will likely lead the way, we also anticipate robust deal flow in personal care, beauty, travel, and leisure. Strategic buyers remain focused on synergies, and private equity funds still hold significant dry powder. However, a degree of caution persists, particularly as the current US administration policies have contributed to a climate of uncertainty among businesses in the US which has filtered into M&A activity. These uncertainties may negatively feed into Europe as the year progresses but also may provide opportunities to those that are agile and focused on opportunities.

Ish Alg

Industrials

The Industrials sector continues to send mixed signals. Budget misses have delayed or halted several transactions, and overall teaser-to-close rates are estimated to be just below 50%. Nevertheless, we continue to work with a number of clients operating from positions of strength in highly attractive niches, who are delivering growth across cycles, especially in our core verticals: Aerospace & Defense, Flow Control, Automation, and Safety & Security.

From the buyer perspective, we observe growing private equity interest in businesses with tangible upsides, such as operational optimisation, in contrast to more generic buy-and-build strategies. Strategic buyers continue to execute on M&A strategies, however, with a disciplined approach to valuation.

Sven Harmsen

Technology

We are beginning to see a pickup in M&A activity and private placements in the European tech sector in Q1 2025, despite ongoing global geopolitical uncertainty. While overall deal volume in Europe is broadly in line with Q1 2024, the number of completed deals is down year-on-year.

AI, particularly agentic AI, is becoming a central theme in VC investments. We are also seeing tech companies leverage AI to drive commercial success with lean, highly efficient teams. Secondary transactions remain a key feature of funding rounds, reflecting the market’s increasing emphasis on capital efficiency and a path toward sustainable, profitable growth.

Rita Lei