The SMB M&A Pipeline: Q3 2025

Welcome to the Q3 2025 issue of The SMB M&A Pipeline, the quarterly series that surfaces a top-of-the-funnel breakdown of the deal activity on Axial’s platform. The aggregated metrics include quarterly deal volumes, financial and geographic characteristics, and pursuit rates, sorted by industry category.

All deal data is fully anonymized to protect the confidentiality of these transactions.

Pursuit Rates

“Pursuit rate” measures the rate at which Axial’s buyside members register interest in a deal that an Axial sell-side member has invited them to consider. If NDAs, IOIs, and LOIs reflect the deepening progression of interest among acquirers on a given deal, the pursuit rate is one step higher in the funnel than the signed NDA. It offers insight into the forward deal pipeline and the initial interest level of prospective Axial buyside members.

An Overview of Q3 2025

We saw 3,320 deals come to market in Q3, a 7.93% increase from the same time period last year and the second-highest quarterly total on record. Five of the seven major industries reported year-over-year increases, with Healthcare posting the highest increase (+27.3%), followed by Business Services (+13.07%). Industrials (+7.79%), Technology (+6.59%), and Food & Hospitality (+6.47%) each posted more modest gains, signaling steady sell-side activity across these sectors.

Consumer Goods (-0.9%) and Transportation (-2.12%) were the only sectors to see slight YoY declines, which may suggest some pullback in seller activity or timing adjustments in those markets. Overall, deal volume growth remained steady but moderated compared to earlier in the year, signaling a more measured and deliberate pace of sell-side activity heading into Q4.

Deal Volume vs. Pursuit Rate

Industrials saw continued alignment between supply and buyer demand, ranking 1st in both deal volume and pursuit rate in Q3. Technology showed a notable supply-demand mismatch, ranking 6th in deal volume and 3rd in pursuit rate, suggesting that buyers are competing for a limited set of scalable, defensible tech platforms. In contrast, Food & Hospitality and Consumer Goods posted high deal volumes but low pursuit rates, which may reflect continued caution around cost structures, evolving consumer behavior, and inflationary pressures.

Despite a ~27% YoY increase in marketed Healthcare deals, the sector ranked 4th in overall deal volume on Axial, while coming in 2nd for pursuit rate — a notable increase from 5th last quarter. The rise in buyer interest aligns with findings from Axial’s latest Industry Top 50 report, featuring the Top 50 LMM Healthcare Investors & M&A Advisors. Surveyed dealmakers reported rising activity and steady valuations across healthcare services and technology segments.

Below is a breakdown of industry-specific and overall deal activity on Axial in Q3. Feel free to incorporate this data into your materials as you see fit.

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Deal Intent Definition: A project created by a buyside member on Axial to signal the types of businesses they are actively looking to acquire or invest in, based on criteria like industry, size, and geography. Based on the specified range, deal intents can fall into multiple EBITDA buckets (e.g., $1M–$4M falls into both $1M–$3M and $3M–$5M).

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Over 3,500 advisory firms and 3,000 corporate and financial buyers have joined Axial to efficiently connect with relevant capital partners, source actionable deals, and build new relationships.

Visit the Member Closed Deals page to see selected transactions that have been sourced and closed via Axial.