Quarterly Tech M&A Update | Q3 2026

Tech M&A activity weakens further as cross-border deals gain importance

European tech M&A activity continued to weaken in the third quarter of 2026. Transaction volume fell to 314 deals, down 14% from Q2 and marking the fourth consecutive quarterly decline. The slowdown was even more pronounced in Germany, where only 52 transactions were completed, representing a 46% sequential decrease.

Year to date, European tech M&A activity is approximately 42% below the comparable prior-year period, while Germany is down around 35%. Despite lower overall transaction volumes, the buyer mix remains remarkably stable. Strategic investors continued to dominate tech M&A activity in the first nine months of 2026, accounting for 88% of European transactions and 87% of German deals. At the same time, cross-border activity gained further share. In Europe, cross-border transactions represented 57% of activity, compared with 44% in 2025. In Germany, their share increased to 68%, up from 60% last year.

The decline in deal activity was visible across all four technology segments tracked in our report. Application Software recorded the sharpest contraction, falling 50% to 108 transactions. IT Services declined 15% to 121 deals, Systems Software fell 18% to 27 transactions and Semiconductors decreased by approximately 36% to seven. Activity in all four segments also remained below Q3 2025 levels.

Disclosed EV/Sales transaction multiples presented a mixed picture. Application Software increased from 1.3x to 1.5x, while IT Services declined from 1.2x to 0.8x. Semiconductors recorded a multiple of 10.6x, while no Q3 multiple was available for Systems Software. Given the limited number of disclosed transaction multiples, however, these figures do not indicate a broad-based valuation recovery.

Public market performance also diverged significantly across technology subsectors. Systems Software led the selected peer groups with a Q3 return of 20.6%, followed by Technology Hardware & Equipment at 14.5% and Application Software at 14.3%. IT Services gained 1.8%, while Semiconductors was the only segment to record a negative quarterly return, declining 3.3%. At the same time, the Semiconductor peer group showed by far the highest expected revenue growth for 2026 at 68.4%.

Valuation levels therefore remain polarized, with Systems Software and Semiconductors continuing to trade at the highest multiples among the selected peer groups. The Q3 figures once again underline the significant differences in how individual technology segments are currently valued.

Our Tech Deal of the Quarter is Waterland Private Equity's acquisition of CQM Rewards, which is joining forces with Waterland portfolio company GoGift. The combination brings together CQM's loyalty technology and Southern European expertise with GoGift's global gifting platform, supporting the ambition to create an international technology-enabled leader in corporate gifting and rewards. Oaklins acted as advisor to CQM Rewards on the transaction.

Our latest Quarterly Tech M&A Update examines:

tech M&A activitiy across Europe and Germany
buyer structures and the increasing importance of cross-border transactions
deal activity across Application Software, IT Services, Systems Software and Semiconductors
current transaction and public market valuations
selected technology transactions from Q3 2026
and Oakins' Tech Deal of the Quarter

We hope you enjoy reading the report and look forward to discussing its findings with you.