IT Services M&A Activity Rose in Eastern Europe
A new report shows software development valuations reached 7.0x in H1 2026 despite persistent valuation gaps.
Updated on Oct. 8, 2026 in Software
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Dealsuite released its CEE Tech Sector Monitor 2026, revealing that IT services have become the most sought-after segment in Central and Eastern Europe. The report highlights a growing interest from foreign buyers, who accounted for over 60% of all regional transactions in 2025.
Why it matters
The region continues to attract capital due to lower IT salary costs compared to Western Europe, though macroeconomic uncertainty is forcing buyers to remain highly selective. Consequently, deal success remains pressured by significant valuation gaps between buyers and sellers.
Software development valuation multiples climbed to 7.0x in H1 2026, while IT services fetched 6.2x. Sellers frequently overvalue their assets by 28%, resulting in a 35% abandonment rate for M&A processes.
The players
Dealsuite
A platform for M&A professionals that aggregates regional transaction data and deal-flow monitoring.
Lexters
A law firm based in Bucharest that provided legal analysis for the regional M&A market report.
The details
The report integrates platform activity data with legal insights from Lexters to map regional deal flows. Growth in cross-border interest is primarily driven by a 30-40% labor cost advantage in CEE compared to Germany, the Netherlands, and Luxembourg. Strategic buyers and private equity funds remain the dominant actors, focusing acquisition efforts on artificial intelligence, cybersecurity, fintech, and enterprise software.
Timeline
H1 2024: Software development valuation multiples were 6.4x.
2025: 60.8% of regional transactions involved foreign buyers.
August 2025: Advisers initially expected a decline in IT transaction volume.
H1 2026: Valuation multiples for software development reached 7.0x.
October 8, 2026: Dealsuite published the CEE Tech Sector Monitor 2026 report.
The Tech Race
The 2025 Telecom and IT sector investment volume of EUR 5.24 billion serves as the benchmark for regional market health. Current indicators suggest 2026 will exceed this figure, marking the highest funding volume observed over the past three years.
Professional investors and tech founders should monitor the ongoing valuation gap, which currently forces the abandonment of roughly one-third of deal processes. Firms with expertise in cybersecurity and artificial intelligence are currently positioned to capture the highest levels of buyer interest.
The takeaway
The sustained interest in CEE-based IT services suggests that labor cost advantages remain a powerful driver for cross-border investment. Stakeholders should track total annual funding volumes to determine if the 2026 projections confirm a return to record-high acquisition activity.
Further reading
For broader trends in regional enterprise technology, explore the Software section.
Source note: This article includes information reported by Business Review.
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