Software at the core of mid-market TMT deals

Dealmaker attention across the global technology, media and telecommunications (TMT) mid-market is converging on a narrow set of sectors where strategic relevance, revenue visibility and long-term demand align.  

Despite macroeconomic uncertainty and regulatory scrutiny curbing indiscriminate mergers and acquisitions (M&A), the latest Baker Tilly International report, produced in conjunction with Mergermarket, shows capital being deployed with precision into scalable, defensible assets central to digital transformation.  

In 2025, that conviction was overwhelmingly focused on software, with selective interest in semiconductors, media and telecommunications. 

Software cements mid-market dominance 

Software continues to lead mid-market TMT M&A by a wide margin, accounting for roughly 80% of deal volume and 77% of value in 2025.  

Deal values rose more than 20% year-on-year to approximately US$184bn, while volumes grew 3% to nearly 2,000 transactions. 

This sustained momentum reinforces software’s position as the structural core of the TMT ecosystem, particularly in the mid-market where activity remains resilient despite large-cap volatility. 

AI-enabled analytics, automation platforms and data-driven businesses are attracting premium valuations as acquirers prioritise technologies that integrate across operations rather than sit as standalone tools. Elsewhere, cybersecurity has become mission-critical, underpinning AI adoption and wider digital transformation. 

Together, these forces cement software’s status as the mid-market’s most scalable and future-proof investment class. 

Semiconductors: Strategy over scale 

Mid-market semiconductor M&A tells a nuanced story.  

Deal values remained flat at US$17.3bn in 2025, yet transaction volumes rose nearly 20%.  

This divergence underscores the sector’s strategic importance, with acquisitions increasingly targeting capability, intellectual property and niche manufacturing rather than pure value growth. 

Geopolitical pressures, industrial policy and supply chain resilience continue to shape activity, with buyers favouring smaller, focused deals that secure critical assets while limiting regulatory exposure.  

Unlike large-scale top-market transactions, mid-market semiconductor M&A operates with precision, deploying capital strategically and with less complexity than transformational deals. 

Media: Digital drives deals 

Mid-market media remains a smaller but meaningful segment of TMT dealmaking.  

In 2025, deal values rose 4% to US$11.2bn, even as transaction volumes fell 6%, contrasting with broader TMT media where large-scale deals drove a value decline. 

Investor interest is increasingly focused on digital-first businesses with clear monetisation paths.  

Data-driven marketing platforms, content businesses leveraging audience analytics, and AI-enabled personalisation assets are the most attractive targets.  

Traditional media faces structural headwinds, but digitally-enabled platforms are creating opportunities where technology and content intersect. 

Telecom: Steady strategic growth 

Mid-market telecommunications continue to deliver consistent, strategically-driven growth.  

In 2025, deal values rose 5% to US$16.3bn, with volumes up 7%.  

While telecommunications does not capture the same spotlight as software, its importance is rising as connectivity, network resilience and data security become central to economic infrastructure. 

What next in 2026? 

Mid-market TMT M&A is shifting from volume-driven activity to selective, strategy-led deals.  

Software remains the clear outperformer, while semiconductors, media and telecommunications offer differentiated opportunities shaped by technology, regulation and geopolitics.  

Dealmakers who understand these dynamics are best positioned to identify assets that deliver sustainable growth through 2026 and beyond.