Private Equity Tech M&A: Growth in 2025

Private Equity-related M&A in tech sectors grew dramatically in 2025. PE firms focused on large-scale deals that resulted in a significant increase in total deal value for the year. With more than $6 trillion of dry powder on hand, pent up demand for investment, and stabilizing interest rates, PE firms spent $1.2 trillion in tech company acquisitions in 2025, a 36% increase over 2024. That growth included a record number of megadeals, the largest of which was the $55 billion acquisition of gaming company Electronic Arts by a consortium of buyers led by Saudi Arabia's Public Investment Fund (PIF). 

The growth trajectory in 2025 is expected to continue in 2026 as PE firms continue to deploy their extensive dry powder on attractive tech company targets. In fact, there have already been a number of PE involved megadeals of tech companies this year. For example, Hg Capital announced in January it will acquire fintech company OneStream for $6.4 billion, and DigitalBridge Group and Crestview Partners completed an acquisition of fiber ISP WideOpenWest (WOW!) for $1.5 billion in February.

PE firms are looking for tech companies with strong recurring revenue and a clear path for value creation. If your company has those characteristics and you're interested in selling, there are PE buyers willing to offer high valuations.  Now is an excellent time to take your company to the M&A market.

Hot tech sectors

AI, digital infrastructure, and cybersecurity were the most targeted tech sectors by PE firms in 2025.

AI

In 2025, PE firms aggressively made AI-related acquisitions across a broad range of tech sectors, with a focus on established companies that have proven AI use cases. Many of these acquisitions focused on securing proprietary technology and specialized talent.

EQT's 2025 acquisition of Remember & Company, a South Korean provider of an AI-powered HR tech platform, is an example of a PE firm acquiring a company with proprietary AI technology. Remember's AI- HR tech platform is built on proprietary human capital data assets and AI. EQT aims to accelerate Remember’s growth in AI-driven talent management, recruitment services, and data analytics across Asia.

AI talent acquisition became a major focus for PE-backed portfolio companies in 2025.  For example, technology company ManTech, a portfolio company of Carlyle Group, acquired Elder Research, an AI firm specializing in data science, analytics, and AI solutions. ManTech made the deal specifically to enhance its AI and data science capabilities by incorporating Elder Research’s team of specialists and their 30 years of applied experience.

PE firms also prioritized companies utilizing AI to optimize operations of its portfolio companies. One example is the acquisition of Machinify, a provider of an AI-powered healthcare intelligence platform, by PE firm New Mountain Capital. Machinify's platform uses AI to streamline healthcare payments. With the acquisition, New Mountain Capital combined Machinify with existing healthtech platform companies in its portfolio to create a AI-powered payment integrity platform that streamlines healthcare claims processing, reduces administrative costs, and improves payment accuracy.

Data infrastructure

The massive data and energy requirements for AI fueled a surge in PE investments in infrastructure in 2025.  The largest data infrastructure deal in 2025 was the $40 billion acquisition of Aligned Data Centers, a provider of data infrastructure for large-scale AI, cloud, and enterprise clients, by a consortium led by PE firm Global Infrastructure Partners (GIP), along with Microsoft, Nvidia,  MGX, and the AI Infrastructure Partnership (AIP). The acquisition reflects a surge in PE and institutional investor interest in owning the physical, high-density infrastructure required to support AI growth.

And PE firm Blackstone acquired TXNM Energy, the parent of electricity providers PNM and TNMP, for $11.5 billion. The deal is largely driven by the surging demand for electricity, with AI-powered data centers being a major contributor to that demand.

PE acquisitions of data infrastructure companies are expected to remain robust and continue strongly in 2026, driven by the explosive demand for AI computing power.

Cybersecurity

Cybersecurity remained a high-priority sector for PE acquisitions in 2025 due in part to the increasing threats related to AI workflows. Key focus areas within cybersecurity included cloud security, identity security, and endpoint protection.

One example is Francisco Partners' $2.5 purchase of Apple device management and security firm Jamf. The acquisition, which takes Jamf private, is heavily focused on strengthening Jamf’s security portfolio, including identity and access management (IAM) and zero-trust security for Apple devices.

Also, Swedish PE firm Assa Abloy acquired  SiteOwl, a cloud-based platform that modernizes physical security lifecycle management. The acquisition aligns with Assa Abloy’s strategy of expanding its digital and cloud-based security solutions.

PE interest in acquiring cybersecurity companies is not only driven by threats accompanying AI. It's also fueled by the sector's high-growth, recession-resistant nature, and its critical role in mitigating, and protecting against, escalating global cyber threats.  With cybersecurity spending rising due to digital transformation, remote work, and regulatory pressures, PE firms view these companies as reliable, high-margin assets.

Bolt-On deals proliferate

PE firms made significantly more tech bolt-on acquisitions than tech platform deals in 2025, as they focused on growing existing portfolio companies through attractive value add-ons. One example is Blackstone and Vista Equity Partners' acquisition of work management platform Smartsheet for $8.4 billion. The deal strengthens both PE firms' software portfolios, allowing potential synergies with existing investments in the collaborative work management space. 

There were also many bolt-on deals made by PE-backed companies, such as Thoma Bravo-backed Shophos' $859 million acquisition of Securework, a specialist in managed detection and response (MDR) and extended detection and response (XDR). The deal enhances Shophos' existing MDR an XDR portfolio.

PE firms are expected to continue prioritizing bolt-on acquisitions over new platform deals in 2026, driven by a need to enhance portfolio company valuations, integrate AI, and build scale.

The outlook for 2026

PE M&A of tech companies is expected to continue its upward trajectory in 2026, with anticipated growth in both volume and average deal size. With trillions of dollars of dry powder on hand, a lot pent up demand for investment, and easing interest rates, PE firms are actively looking to acquire technology companies. Now is an excellent time to test the tech M&A market. Corum Founder and CEO Bruce Milne puts it this way: “Tech M&A is thriving. Deal values are up. And opportunity is everywhere. What are you waiting for?”