By Ramone Param, Global Lead - Consulting Industry Intelligence, Strategy, and M&A
Advisory at Kennedy
Strong Tailwinds Expected for Deal Flow in 2025, Driven by Consulting and Innovation-led Professional Services
Kennedy M&A’s latest market intelligence indicates positive expectations for deal activity and growth in 2025, following tentative improvements in activity within the consulting and innovation-led professional services sectors last year. This optimistic outlook is supported by the improving consulting industry, positive macroeconomic indicators, stabilizing inflation, and reductions in interest rates.
Private equity (PE) continues to be a major player in the market, participating at near-record levels, with no signs of slowing down. Sia Partners, for example, secured a €250m minority investment from Blackstone at the close of 2024. Additionally, PE-backed AlixPartners is reportedly considering a sale in early 2025 that could value the firm at over $5bn. This follows notable investments from global firms like EQT, Apax, and Carlyle in the previous year, as well as widespread investment activity in the accounting sector.

Optimistic Signals in North American Consulting
In North America, potential strong tailwinds are expected to follow the election, with various innovation-led professional services segments buoyed by further investment in disruptive trends and a potentially more favorable regulatory environment.
While the deal outlook remains positive, there are several risks that could impact this forecast, including ongoing geopolitical instability and uncertainty from the potential effects of new tariffs and trade agreements.
Deal count (2015 to 2024):

Private Equity’s Dominance
Private equity-backed acquisitions accounted for over half of all deals in 2024, a significant increase from around 25% in 2014. Sia Partners, for instance, secured a minority investment of up to €250m from Blackstone at the end of the year. Furthermore, Bloomberg recently reported that the private equity owners of AlixPartners are contemplating a sale that could value the firm at over $5bn. Landmark deals in 2024 included EQT’s acquisition of Perficient, Apax’s take-private of Thoughtworks, and Carlyle’s investment in SEIDOR, alongside investments in the accounting sector, including New Mountain Capital’s stake in Grant Thornton.
% of Deal Count by Private Equity:

Midmarket and Bolt-on Acquisitions
Although headline-grabbing deals often capture the most attention, considerable activity continues in the midmarket, where investors are making strategic portfolio investments and bolt-on acquisitions to existing portfolio companies. Financial acquirers have become more confident buyers of consulting and innovation-led professional services firms, leading to successful improvements in operating models and the execution of focused strategic initiatives that add value. This uptick in activity is also supported by favorable market conditions for growth in high-demand segments and the substantial dry powder available for acquisitions.
Decline in Valuation Metrics
Overall, average valuation metrics for acquisitions modestly declined in 2024, though significant variations exist by market segment. Private equity reportedly paid a premium for revenue valuation multiples, compared to strategic buyers, although overall valuations dipped toward the end of the year, potentially driven by some caution emerging in Q4. Recent market discussions indicate a recovery in deal activity, driven by strengthening macroeconomic indicators and a loosening capital market, both of which are expected to support improved pricing sentiment in 2025.
Premium valuation metrics remain prevalent for both strategic buyers and financial investors acquiring quality assets in high-growth segments with limited acquisition opportunities. The range of potential valuation outcomes varies depending on the quantitative and qualitative factors of a specific target company and market segment. As emphasized to clients, interpreting average reported multiples requires considering a wide range of factors, including the deal structure.
Valuation metric trends:

Risks to the Deal Outlook
Despite the positive outlook for deal activity, risks to the forecast are continuously being monitored. Key risks highlighted by market participants include the impact of geopolitical instability and uncertainty related to policy changes, such as new tariff policies and trade agreements.
The outlook for deal activity in 2025 is optimistic, driven by strong tailwinds in the consulting and innovation-led professional services segments, as well as continued private equity involvement. However, it is essential to stay vigilant regarding potential risks, particularly from geopolitical instability and policy changes. The market is set for a promising year, with various opportunities for growth and strategic acquisitions across different sectors.
Please note: This article is for educational and informational purposes only and does not constitute investment, tax or legal advice. The intelligence has been gathered from a variety of public and non-publicly available sources, which have not been verified, reviewed or approved. The views and opinions expressed in this article are those of the author and do not represent the views of any affiliate organization. Any opinions or views expressed are as of the date written and are subject to change without notice, and may be updated or modified at any time.
Some of the statements in this report may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognoses (“forward looking statements”), which reflect the current view of the author of future events, economic developments and financial performance. These forward looking statements contain no representation or warranty of whatever kind that such future event will occur or that they will occur as described therein, or that such results will be achieved, as the occurrence of these events are subject to various risks and uncertainties.