Q3 2026 tech M&A: better pricing ahead, but buyers still set the terms

Tech M&A cooled in Q3 2026 as megadeals faded, but buyers did not leave the market. Global IT deal value fell 47.2% from Q2 to $164.8B, while deal count slipped only 4.2% to an estimated 1,962 transactions. Buyers kept closing deals; they simply wrote smaller checks.

The quarter also brought a split in valuations. Private SaaS deals closed at a median of 3.4x revenue, a two-year low, while public SaaS companies rebounded to 4.1x. In IT services, AI capability, not size, decided what firms were worth.

In LatAm, tech M&A moved against the global trend. The region closed 54 tech deals in Q3, up 26% from Q2, with Latin American acquirers behind 78% of them.

These are the main takeaways from our Tech M&A Quarterly Report – Q3 2026, and what they mean for founders building and selling tech companies in the region.

Who is buying tech companies in Q3 2026?

Strategic buyers led the market. Corporates did most of the buying, led by NVIDIA’s $12.9B acquisition of Hugging Face. Strategics were involved in 91% of SaaS deals and about 81% of IT services deals.

Private equity stayed selective. PE’s share of global M&A value fell to 31.8% in 2026 so far, down from 41.6% in 2025, as tighter financing limited what sponsors could pay. Much of PE’s capital now enters the market through add-on acquisitions made by its portfolio companies.

The buyer pool is also widening. Consulting firms and Big Four practices are acquiring hands-on AI delivery teams, and AI labs have started buying delivery capacity directly. For sellers, that means more than one type of buyer at the table.

Why did SaaS valuations fall while public SaaS recovered?

Private SaaS deals closed at a median of 3.4x revenue in Q3, down from 4.1x in Q2 and the lowest level in two years. The drop reflects the public market sell-off earlier in the year, which private deals usually feel later.

Public SaaS has already turned. Public SaaS multiples rebounded from 3.3x in Q2 to 4.1x in Q3, and private valuations usually follow public markets with a lag of six to nine months. That points to better pricing heading into 2027.

Activity held up despite lower prices. Buyers announced 698 SaaS deals in Q3, down 3.9% from Q2, and the year is still on track for a record. SaaS also reached 72.5% of all software deals, the highest share ever tracked.

AI keeps shaping what buyers want:

• AI-related deals reached 41% of SaaS M&A in 2026 so far, on track for the highest share on record.
• Buyers pay a premium only when AI is tied to real customer value: proprietary data, embedded workflows and existing customer relationships.
• The top multiples went to companies that combine those assets, such as Schneider Electric’s acquisition of Cognite at 18.2x revenue.

Financial Services overtook Healthcare as the most active SaaS vertical, with 15.5% of vertical SaaS deals.

What is driving IT services valuations in 2026?

In IT services, buyers are paying for AI capability, not headcount. In Q3 transactions, data and AI engineering firms traded at 3.0x to 6.0x revenue, while managed IT and infrastructure businesses priced near 1x.

The gap comes down to what each business can prove. These factors raised valuations in Q3 deals:

• AI delivery already running with clients, beyond pilots
• A high share of recurring, managed-services revenue
• Certified depth in a leading platform ecosystem, such as Microsoft, AWS, Databricks, Snowflake or Salesforce
• Embedded engineering teams and owned nearshore capacity

These factors compressed them:

• Legacy work with no clear AI modernization path
• Heavy reliance on hardware or license resale
• Dependence on contractors or a few key people
• Client concentration without long-term contracts

For LatAm IT services firms, nearshore engineering talent with proven AI delivery is a real advantage in a sale process.

LatAm tech M&A Q3 2026: a rebound led by local buyers

LatAm tech M&A closed 54 deals in Q3 2026, up 26% from 43 in Q2 and slightly below the 58 recorded in Q3 2025. The rebound ran against the global trend, where IT deal count slipped 4.2%.

Buyers were increasingly local. Latin American acquirers were behind 78% of Q3 deals, up from 70% in Q2. Brazil drives much of that figure: excluding Brazilian deals, the split narrows to 55% regional and 45% cross-border, so foreign buyers remain active across the rest of the region.

Brazil and Fintech kept their lead. Including both acquisitions and investments, Brazil accounted for 56.5% of the quarter’s tech activity, and Fintech for 40.9%, more than five times the next vertical.

The wider regional market shows the same pattern of fewer, bigger deals. Across all sectors, LatAm M&A value dipped just 5.1% year to date, while deal count fell 26%. Foreign buyers made 582 acquisitions in the region through September, which confirms that the buyer universe for a LatAm company is global.

What is the outlook for tech M&A in Q4 2026?

Public valuations are recovering, while strategic buyers, AI capability and selective capital keep shaping which deals get done. These are the four signals we are watching:

1. Private valuations should start following public markets up. Private pricing usually catches up with public markets within six to nine months, which points to better terms heading into 2027, first for companies with proprietary data, embedded workflows and real AI relevance.
2. Strategic buyers will keep setting the pace while PE stays selective. With the Fed raising rates in September and leverage more expensive, private equity will likely keep favoring add-ons over new platforms.
3. AI will keep widening the gap between IT services winners and losers. With consulting firms and AI labs buying delivery teams, competition for AI-capable talent should keep rising, while labor-based, undifferentiated models face more pricing pressure.
4. LatAm will keep favoring fewer, bigger bets, with local buyers in the lead. Post-election policy in Brazil, rate cuts in several markets and trade clarity for Mexico will decide how many of the deals deferred in the first half come back before year-end.

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