As we move further into 2025, Canadian business owners are facing an economic landscape filled with both challenges and opportunities. For those considering selling their business or acquiring new assets, understanding the economic environment is critical. Here’s a look at the key trends shaping the mergers and acquisitions (M&A) market and what entrepreneurs should expect.
1. Slower Economic Growth, But Resilient Markets
The Canadian economy is projected to grow at a slower pace this year due to high interest rates and global economic uncertainty. However, sectors like accounting, professional services, and technology remain strong, making them attractive targets for acquisition.
For business owners looking to sell, this means valuations may remain stable, particularly in industries with consistent demand. Buyers, on the other hand, need to be strategic in their acquisitions, focusing on businesses with strong cash flow and minimal exposure to economic downturns.
2. The Impact of High Interest Rates on M&A
Interest rates remain elevated, increasing the cost of debt financing for business acquisitions. This is making cash-flow-positive businesses more attractive to buyers who want to minimize leverage.
For sellers, this means buyers may push for more favorable deal structures, such as earnouts or seller financing, rather than large upfront payments. Those planning to exit should be flexible in deal negotiations to attract serious buyers.
3. Increased Business Listings as Owners Seek to Exit
With rising costs and economic uncertainty, more business owners—especially those nearing retirement—are looking to sell. This presents a prime opportunity for acquisition-focused entrepreneurs to roll up businesses into their portfolio.
Industries seeing the most listings include:
• Accounting & Financial Services (Stable recurring revenue models)
• Manufacturing & Logistics (Challenged by supply chain costs but still profitable)
• Professional Services (Law firms, consulting agencies, marketing firms)
4. Private Buyers Are Beating Out Larger Firms
Due to tighter lending conditions, large corporate buyers and private equity firms are being more selective with acquisitions. This is opening doors for private investors and entrepreneurs with access to capital to acquire businesses that might otherwise have been out of reach.
If you’re a business owner looking to exit, consider selling to an individual or small investor who can move quickly without the bureaucratic delays of institutional buyers.
What This Means for Business Owners and Investors
• If you’re selling: Now is a good time to find buyers, especially if your business has strong financials. Be prepared for creative deal structures.
• If you’re buying: More businesses are coming to market, but financing is expensive. Look for opportunities with seller financing or deferred payments.
• If you’re in M&A: The next 12–18 months could be prime time for roll-ups and consolidations.
At Maverick GP, we specialize in business acquisitions and connecting sellers with the right buyers. If you’re considering selling your company or investing in high-net businesses, let’s discuss how we can work together.
