M&A in IT Services: Deal Volumes Show Records Highs in 2024

Introduction

The IT Services sector has experienced a significant comeback in M&A activity following the 2022 downturn as leading players in the industry seek to consolidate their positions and acquire new capabilities. Accenture exemplifies this trend as the sector’s most prolific acquirer, having completed nearly 60 IT services acquisitions since 2015. Ongoing digital transformation and the rise of AI continue to fuel strong demand for advanced IT solutions, making M&A a key strategy for staying competitive.

In this article, we take a deep dive into the IT Services M&A landscape over the past 10 years (2015 to Q1 2025) and try to make generalizations for where the industry is heading. We show which countries have the highest levels of M&A activity and the average deal size per country, as well as who the most active strategic buyers are and their target preferences. We also show the current EBITDA valuation multiples in completed IT services transactions and examine how deal size influences these multiples.

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Table of Contents

1. Overview of M&A in IT Services
   • Total deal volumes
   • Deals by target country
   • Deals by country & deal size
   • Strategic vs financial acquisitions
   • Top 10 most active strategic acquirors
2. Valuation in IT services M&A
   • EBITDA multiples in transactions
   • Size effect on valuations
3. Summary
4. About Aventis Advisors

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M&A in IT Services

We conducted an in-depth analysis of close to 10,000 M&A transactions in the IT Services industry that took place between 2015 to Q1 2025 (March 31). We examined various trends and metrics, including the total number of IT Services deals by geographic region and investor type.

Next, we examined how the transaction multiples within the IT Services sector have changed over the period. Roughly 400 transactions had disclosed EBITDA multiples, giving us adequate data to draw meaningful conclusions and insights.

For more insights specifically on IT services valuations, covering both public and private valuations, check out our article on IT Services Valuation Multiples. For a background on the classifications and sub-sectors of IT services firms and the most extensive public IT services index check out our article here Aventis IT Services Valuations Index.

Total Deal Volumes

The data shows a steady upward trend in IT Services M&A transactions between 2015 and 2021. Deal volumes increased at an average annual growth rate of 8% during the first seven years, in line with the growing demand for services offered by IT Services companies.

2021 saw a peak in IT Services M&A deals, totaling 1,104 transactions. Tailwinds provided by accelerated digitalization and a favorable macro environment, including abundant liquidity and unprecedented business and consumer confidence, played a crucial role in deal volume growth.

However, as the market turned sour in 2022, the number of M&A transactions in the IT Services sector dropped by 16% to 874. The challenging macroeconomic outlook caused buyers to adopt a more conservative strategy, placing a higher premium on cost savings and organic growth rather than expansion through M&A.

While 2022 presented a temporary headwind, the fundamental drivers of IT Services M&A remained strong. Digital transformation initiatives have remained a top organizational priority, and the sector’s inherent stability, marked by consistent revenue growth, healthy margins, and asset-light operations, provided a solid foundation for recovery. The industry saw a significant rebound in deal volumes in 2023, followed by new record highs in 2024 (nearly 1,200 transactions), driven by renewed investor confidence and a growing enterprise interest in AI capabilities.

With the ongoing secular demand for IT services and the strong start we’ve seen in 2025, we expect both strategic and financial investors to keep driving robust M&A activity, building on the momentum from 2023 and 2024.

Deals by target country

Europe has emerged as a hub for IT Services M&A, with 4,150 deals taking place over the past 10 years. However, it is important to note that these deals were predominantly centered in the major economies of Europe. Nearly 50% of the acquired companies were domiciled in the United Kingdom, France, and Germany. Conversely, 16 European nations had less than ten IT Services M&A transactions during the period.

North America is a close second to Europe, with 3,504 M&A deals, with the USA representing 91% of the deal volume. Asia recorded a comparatively lower volume of 1,548 transactions, with China (566), Japan (265), and India (178) being the most active. Given the growing investor confidence in emerging markets, particularly the continued robust growth anticipated for China and high expectations for India’s potential, we foresee increased M&A activity in the Asian IT services sector in the coming years.

Deals by country and deal Value

The USA leads not only in the number of deals but also in average deal value, at nearly USD 350 million. The Netherlands and France follow closely with averages of USD 337 million and USD 322 million, respectively. At the other end of the spectrum, Brazil recorded the lowest average deal value at USD 67 million per IT services firm.

Strategic vs. Financial Acquisitions

At the beginning of this analysis in 2015, strategic investors were the dominant force in IT services M&A, accounting for approximately 75% of all deals. Since then, there has been a significant shift, with financial investors becoming increasingly active, representing 44.6% of deals in 2024. This trend is continuing into 2025, with Q1 data indicating that nearly half of all transactions are now backed by financial investors.

This shift is partly driven by the rapid expansion of the private equity industry, as well as an increasing number of strategic acquirers partnering with private equity firms to accelerate growth through acquisitions.

Top 10 most active strategic acquirers of IT services firms

A comparison between Accenture and Atos, the top two most active strategic acquirers in the IT services sector, illustrates how acquisition-driven strategies can lead to very different outcomes.

Accenture has followed a disciplined M&A approach, completing over 55 IT services acquisitions in recent years (according to Mergermarket), contributing to a share price increase of more than 60% over the past five years.

In contrast, Atos’s share price collapsed by more than 99% during the same period. The company is now undergoing multiple restructurings and facing the risk of bankruptcy. Atos decline is largely attributed to an unsustainable debt load and overpaying for acquisitions. A notable example is its 2018 purchase of Syntel at 3.4x revenue, more than double the industry median of 1.4x for IT services transactions between 2015 and 2024.

For an overview of the most active financial buyers of IT services firms, driving the higher rate of financial buyers, check out our article on the top private equity investors in IT services.

Valuation in IT Services M&A

The EBITDA multiple is the most used valuation multiple in IT Services M&A transactions. EBITDA is suitable for IT Services companies as they typically do not require substantial initial investments and are projected to produce positive cash flows in the early stages of their operations.