What To Expect In SaaS M&A In 2025, & How To Prepare

Jared Lindzon

Ben Slager

CEO & Co-Founder, Morgan Daniels Slager LLP

The new year is expected to bring a new level of M&A activity, but not for the reasons many had previously assumed. While lower interest rates will likely inspire more activity, the growing gulf between currencies may make Canada a more appealing target for US investment. M&A lawyer and expert Ben Slager shares his predictions for the year to come, and his advice for founders looking to land a deal in 2025.

Key takeaways:

  • After a prolonged slowdown M&A activity is poised to increase in 2025
  • The strength of the US dollar may prove more consequential than lower interest rates
  • That is especially true if President Trump makes good on his tariff threats, which typically don’t apply to software providers
  • The lingering wounds of the last downturn will inspire more due diligence
  • Founders can better position themselves by investing in audited financials, aligning partner priorities, seeking expert advice outside their network, and maintaining focus on the core business, even when a deal seems imminent

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After a few slow years, the M&A deal flow cycle is starting to turn a corner.

From lower interest rates to the threat of tariffs, currency trends and pent-up demand, 2025 is poised for a strong turnaround, according to Ben Slager, a partner and CEO at Vancouver-based M&A and private equity law firm Mogan Daniels Slager LLP.

“Like so many things in market there’s a natural cycle,” he says. “We’re coming out of a period where nobody was really interested in SaaS — or at least confident in it, or willing to pay the price that was being asked — and now I get a sense the market is building confidence again.”

Speaking with TechExit.io, Slager offered his best predictions for what the market has in store in 2025, and some best practices for founders and partners looking to land a deal this year.

What to expect in M&A in 2025

1. Keep an eye out for green shoots

Though the market hasn’t yet tipped into a full recovery, lower interest rates and general economic stability have brought a greater sense of optimism, Slager says.

“I think the jury is still out on whether we have green shoots — I think there’s still compression on pricing,” he says. “It’s not back to levels that we saw two and a half years ago.”

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2. Currency over interest rates

While the recent uptick in activity is widely credited to lower interest rates, Slager suggests that’s only one piece of the puzzle. Of equal or even greater significance, he says, is the recent and dramatic rise in the US-currency against the Canadian dollar.

“I’ve certainly seen an uptick in U.S. interest in Canadian targets, and it grows as the Canadian dollar struggles,” he says. “That trend of U.S. buyers looking for Canadian opportunities, I expect to see more of that.”

3. Tariff threats add to SaaS appeal

Though it remains to be seen whether Canada faces the 25% tariffs President Trump has threatened in 2025, Slager says SaaS companies are typically immune from such policies, putting them in an advantageous position. That’s because those institutions attracted by the favourable currency conditions may pivot away from sectors in the President’s crosshairs, and towards those that have historically been tariff-proof.

“Those tariffs would generally apply to hard goods,” he says. “So maybe we’ll start to see some of that conventional private equity money focus on areas it hasn’t focussed on before, given the exchange-adjusted price point.”

4. Expect more due diligence

While the market appears ready for takeoff, Slager says participants won’t soon forget the hard-learned lessons of the recent past. As a result, expect acquirers to take a closer look under the hood before launch.

“Buyers are actually okay if things take another 30 days, because they want to make sure that the SaaS-based revenues have integrity,” he says. “They want to look at churn, there’s more price sensitivity on deals, and I’m seeing earn outs equate to a much larger percentage, which is a reflection of uncertainty about the future.”

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How to prepare

Go audit yourself

Those hoping to land a deal in 2025, or beyond, should consider a few proactive steps to better prepare themselves for any opportunities that come their way.

“One thing I’m on a soapbox about is audited financials,” says Slager. He explains that exit-eager founders who invest in auditing their financials often stand to recoup the costs — and then some — by making themselves more appealing to potential investors.

“If you have a U.S. pub-co looking to acquire you, if you’ve got two years of audited financials — which might cost you $50,000 — the ROI in an acquisition process is just tremendous” he says. “You instantly offer a higher level of comfort with the acquirer and make due diligence easier for them.”

Ask around

One major mistake Slager says founders often make upon receiving an unsolicited acquisition offer is staying inside of their own bubble. He explains that when an offer worth entertaining crosses their desks with what might be an eye-popping number, they should immediately seek the advice of an investment banker or M&A advisor outside of their local network, or even outside of their home country, with expertise in the area.

 “Go to where those deals in that niche are being done and get a sense from their experts,” he advises. Usually, they’ll do it for free in a couple of hours hoping that you’ll engage them as a client.”

Get on the same page

Perhaps the worst time for partners to discover they’re misaligned is when a deal is on the table, as those fractures can cause it to stall or even collapse. According to Slager, partners should have those conversations well before an offer is made to gain an understanding of where each stakeholder stands.

“Often when they receive an unsolicited offer, it creates confusion and stress between the founders,” he says. “I suggest founders have those ‘what-if?’ discussions well in advance of an offer being made, so that they’re not surprised or confused when it does come, because that surprise and confusion expresses weakness.”

Always keep both feet in the door

Finally, Slager says it’s important for founders not to put too much of their time, energy and resources into seeking or entertaining M&A deals, as it can distract from their core business, and negatively impact their appeal.

“Always assume that your business is not going to sell, even when you’re in a sale process,” he says. “Do not take your foot off the pedal, do not take your focus off of key clients or key development initiatives; just keep your head down and keep operating in a way that’s aligned with your original vision, and keep building.”

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