The new starting point
The Spanish mid-market has completed a full cycle over four years. In 2021, with benchmark rates at zero and the cost of leveraged debt around 3%, EV/EBITDA multiples in the mid-market reached cyclical highs. In 2022 and 2023, the ECB’s aggressive rate hikes compressed valuations, reduced available leverage and cooled activity. In 2024 and 2025, with rates stabilising and buyers adapting to the new cost of capital, multiples began a gradual recovery.
Available data quantifies that recovery. The average EV/EBITDA multiple in the Spanish mid-market closed 2025 at 7.8x, up from 7.4x the previous year and 7.1x in 2023, according to industry sources tracking closed transactions in the segment of companies with enterprise values between €10M and €100M. The trajectory is upward, but the pace of improvement has been moderating: multiples are approaching an equilibrium level consistent with the current cost of capital, not the 2021 cyclical peak.
The relevant macro shift is not that rates are high, but that the market has stopped pricing in further cuts. The ECB kept rates on hold for most of 2025 and resumed hikes in June 2026, setting the reference rate at 2.25%. The 12-month Euribor stands at around 2.8% on a monthly average. And market expectations point to a scenario of rates remaining in this range for an extended period, not a return to zero-rate conditions.
Translated into M&A terms, this means the cost of leveraged debt will remain in the 5.5%–7% range for an industrial mid-market transaction, and return models must work with those numbers.
How the buyer’s logic has changed
The financial buyer of 2021 operated on three pillars: cheap debt, high leverage and multiple expansion at exit. All three have shifted simultaneously. Debt is not cheap, the leverage banks will accept has fallen from 3.5x–4x EBITDA to 2.5x–3x, and multiple expansion at exit can no longer be assumed as a variable that will materialise by itself.
The consequence is that returns must come from the business itself, not from the financial engineering of the deal. This has changed what buyers value and, by extension, what they are willing to pay. Where they once rewarded future growth potential — because they knew they would build it themselves with abundant leverage — they now reward demonstrated quality in the historical record: organic growth already proven over the prior three to five years, margins defensible through the cycle, contractual revenue recurrence, reasonable customer concentration and operational independence from the founder. Where they once accepted a story, they now demand evidence.
This has also changed the premium of the financial buyer over the strategic. Available European data for the recent period places the median multiple for private equity-led transactions at 11.2x EV/EBITDA, versus 8.5x for corporate buyer transactions. The gap remains significant, but it has narrowed compared to 2021. The strategic buyer, financing with its own balance sheet or cheap corporate debt, and paying for real industrial synergies, is regaining an advantage in deals where PE previously set the price systematically.
“The 7.8x average is statistically correct and operationally misleading. It describes a market in which fewer and fewer companies are actually transacting at the mean.”
The bifurcation: the average deceives
The most relevant data point of 2025–2026 is not the level of multiples, but their dispersion. And that dispersion is not cyclical: it is structural. It reflects a market where the difference between the first and fourth quality quartile commands a higher premium than in any previous cycle.
At a global level the pattern is repeated and amplified. Buyout transactions above $1 billion priced at a median multiple close to 15x, versus 12.8x for mid-sized deals and below 10x for those under $100 million. The operational conclusion is the same at any scale: buyers pay for quality at increasingly higher multiples and penalise the lack of quality at increasingly lower ones.
The average — which continues to appear in headlines — conceals a bifurcated reality where almost no one actually transacts at the mean.
What moves the multiple in this cycle
If dispersion is the dominant characteristic of the market, it is worth understanding which factors explain it. In transactions closed in 2025 and in the first half of 2026, top-quartile multiples are concentrated in businesses that combine several of the following traits:
- Documented recurrence. Multi-year contracts, subscriptions, maintenance, consumables, embedded software. Any mechanism that reduces uncertainty about future EBITDA commands a premium.
- Founder independence. A management team with real responsibilities, the ability to present the business without the owner, demonstrable operational autonomy. The most frequently cited factor by buyers in their investment papers this cycle.
- Defensible competitive position. Niche leadership, technological or regulatory barriers, long-standing customer relationships that are not easily replicated. Not necessarily a large business: a smaller company with a strong position holds up better than a larger one with a generic position.
- Quality of financial information. Audited accounts, consistent management reporting, ability to present normalised EBITDA in a way that is defensible in due diligence. In 2021, a buyer accepted average-quality information if the price was attractive. In 2026, data quality directly affects the multiple offered.
- Sector with favourable dynamics. Energy and healthcare have sustained the highest valuation premiums consistently; technology SaaS is going through a reassessment phase due to generative AI disruption; commodity sectors have seen sustained multiple compression.
Assets that combine three or more of these traits systematically close in the top quartile. Those that combine none systematically close in the bottom quartile. The honest question for the seller is: of the five factors, how many can you demonstrate today, and how many can you build over the next twelve to twenty-four months?
What this means for sellers in 2026
The recovery of multiples in the Spanish mid-market is real, but asymmetric. Those who sell with median metrics will achieve median multiples. Those who sell with proven recurrence, a professionalised team and a defensible narrative will achieve top-quartile ranges — which in many cases are two or three EBITDA turns above the sector’s descriptive average.
The difference between one position and the other, translated into price for the seller, is usually far greater than the difference between selling this year or waiting until next.
The operational question of this cycle, therefore, is not when cheap money will return. It is what characteristics a business must have to justify a top-quartile multiple at current rate levels. And the answer to that question — recurrence, autonomy, competitive position, quality of information — is built over time. Not during the sale process, but well before it.
The adviser who understands M&A purely as technical execution works with what the seller delivers when the mandate begins. The one who understands that the multiple is determined largely by what the asset is — not how it is presented — works with the seller on the levers that genuinely move valuation months or years before launching the process. In a market dominated by dispersion, that difference in approach is probably what weighs most heavily in the final signed price.
