Private equity and venture capital funds have become much more active in mid-market cross-border mergers and acquisitions, with a strong focus on buying up companies developing artificial intelligence (AI).
Around 50% of all international deals globally in the middle market revolve around IT and healthcare – two of the sectors forging ahead on AI – with North American acquirers most active.
Despite worries about the impact of ongoing conflicts and Washington’s tariffs dragging on growth, there were a total of 41,010 M&A deals across the world, a significant increase on the 36,442 recorded in the previous 12 months..
The findings are from the latest edition of the Compass Report, commissioned by Moore Global Corporate Finance (GCF), which focuses on transactions of between €10 million and €200 million.
“Despite global macroeconomic headwinds and geopolitical unrest, the volume of deals completed in 2025 hit a five-year peak,” says John Cowie, chairman of Moore Global Corporate Finance.
“The total value of those deals was the highest we’ve seen since the first Compass Report in 2019. This may seem surprising at first glance but it reinforces our belief that mid-market corporates cannot rely on organic growth alone if they want to compete on the global stage.
“They need to have a cross-border M&A strategy sitting alongside business as usual. That’s where we are able to use our extensive international contacts and detailed knowledge of different jurisdictions to identify the right deals and see them through to a successful conclusion.”
Growth of a €200bn M&A market
The Compass report, produced by Vlerick Business School in Belgium, reveals cross-border mid-market M&A has been resilient and stable for much of the last decade.
The main findings on cross-border mid-market deals:
Other key points:
- Cross-border transactions accounted for 39% of all mid-market M&A, compared to 33% in 2024.
- North American and European businesses are the most active acquirers, leading more than 75% of all deals.
- The total value of deals involving businesses of all sizes has surged by 31% to €1.04 trillion in the past two years alone.
“Our findings show that cross-border mid-market M&A operates by its own logic,” says Kerstin Fehre, professor of strategy at Vlerick Business School. “It is a significant part of the overall deal landscape and is increasingly driven by strategic intent and discipline.
“We see investors using cross-border mid-market transactions to scale and secure key capabilities to unlock innovation, expertise and specialised knowledge.”
The clamour for tech
Investor interest in technology companies goes far beyond buying shares in publicly-listed large enterprises. Mid-market businesses with innovative tech are attractive too.
IT deals are the most sought-after on almost every continent – last year 26% of all cross-border mid-market deals in the sector related to artificial intelligence (AI).
There were 434 AI deals last year, generating almost €20 billion. More than half of acquirers of those businesses were North American, almost twice the level of European rivals and four times higher than Asian buyers.
Key facts about cross-border IT deals in the mid-market:
In a stark example of how fast sentiment shifts, metal and metal products was one of the ‘hot’ sectors in 2024, with the average deal value of €57 million just behind banking, insurance and financial services.
However, the sector did not feature in the top five in the 2025 listings, although Australia was still a key target for US companies and other acquirers drawn by extensive deposits of rare earth minerals.
US looks global, Europe stays local
Elsewhere, the focus of US buyers – the most active in the world – turned more towards the UK, Israel and India. These are all hotbeds of technology development, especially in the field of AI.
The result is that the US is both buying companies that produce vital minerals and also those that use the silicon chips containing these metals to power ahead in software businesses of the future.
In Europe, companies are very active in cross-border mid-market M&A but most business leaders tend to be focused on doing deals with near neighbours, with France and Germany the fulcrum of activity.
However, there was also significant activity among Italian, Spanish, Dutch and Swedish companies.
When European companies do look further afield, the US and Australia feature again as prime target locations. The former may be driven by the need to build an American bridgehead to avoid tariffs, while the latter reflects the rush for critical minerals by IT and manufacturing industries.
The UK remains the outlier, with some 34% of companies targeted by British buyers located in the US. In total, they completed 264 deals worth €13.6 billion, with an average deal value of €51.5 million.
Changing profile of buyers
Private equity, venture capital funds and hedge funds are increasing their presence in mid-market cross-border M&A activity.
They now make up 35% of financial buyers – up from 28% in 2024 – and have taken market share from institutions and pension funds.
Moore Global Corporate Finance is a leading advisor in cross-border M&A and deals with many of the leading financial buyers, as well as other parties involved around the transaction table.
Last year, there were 770 deals worth €36bn with acquirers from countries where Moore GCF is active. Meanwhile, the results show 1,077 deals worth €53.7bn where targets are based in Moore GCF countries.
Motivation for deals
The Compass report delves into granular detail about the motivation driving cross-border mid-market M&A.
The findings emphasise how uncertainty about access to some markets and the scramble for technology are driving dealmaking.
The three most cited reasons for deals are:
- The perceived need to ‘scale-up’ new technology innovations from the research laboratory into fully-fledged, revenue-generating businesses quickly – 35.8%
- A desire to acquire IP for those businesses that do not own their technology – 21.2%
- Eagerness to enter new markets – 14.5%
