The M&A market remains one of the most dynamic spaces for business owners, private equity firms, and investors. While interest rates and economic uncertainty have slowed some transactions in recent years, deal activity in Texas remains strong, especially in DFW, one of the nation’s top entrepreneurial hubs.
To get a closer look at how business owners, buyers, and investors are navigating the 2025 M&A landscape, I sat down with Alex Vantarakis, Founder of The Vant Group, an M&A advisory firm with over 26 years of experience in helping businesses buy, sell, and value companies.
Alex shared his thoughts on why Texas continues to be a premier market for M&A, how interest rates impact deal structures, and what buyers are looking for in today’s competitive environment.
See full interview here
The State of M&A in 2025: Steady Activity in DFW and Beyond
According to Alex, M&A activity in Texas remains strong, even in the face of economic fluctuations.
“We live in one of the top three entrepreneurial capitals of the country—Dallas-Fort Worth, parts of Florida, and Atlanta are at the top,” he noted. “There’s always M&A activity happening. The drivers may change, but the deals never stop.”
This resilience is due to several factors:
- High levels of corporate migration—Companies continue to relocate to Texas for its business-friendly environment.
- Diverse buyer interest—Private equity firms, corporate buyers, and individual investors are actively looking for deals.
- Entrepreneurial spirit—Business owners in Texas are growth-oriented, making acquisitions a key expansion strategy.
Alex emphasized that different economic conditions create different reasons to buy and sell businesses:
- When the economy is strong, companies use acquisitions to scale quickly.
- When the economy is weak, struggling companies become acquisition targets, while laid-off corporate employees may look to buy a business instead of re-entering the job market.
Regardless of economic conditions, Texas remains a hotbed for M&A activity.
How Interest Rates and Tariffs Are Impacting M&A
Interest Rates: Impacting Pricing and Deal Structuring
One of the biggest economic factors in M&A is the cost of capital, and interest rates play a major role.
“Interest rates were at their peak about 9-10 months ago, but now they’re starting to come down,” Alex observed. “This is good news for deal activity because as interest rates decrease, more buyers enter the market.”
However, he pointed out that higher interest rates don’t necessarily stop deals; they just change the deal terms.
“When interest rates go up, either the buyer pays the price the seller wants and figures out financing later, or the seller takes a haircut on valuation. Most sellers don’t want to reduce their price, so deals get structured differently.”
For sellers, this means being prepared to offer more flexible financing to close deals, including:
- Seller financing—Providing a loan to the buyer to complete the transaction.
- Earn-outs—Receiving a portion of the sale price based on future company performance.
- Alternative financing structures—Including equity rollovers and profit-sharing agreements.
Tariffs: A Potential Concern for Supply Chain-Dependent Businesses
With tariffs becoming a major policy discussion, Alex acknowledged that the real impact remains uncertain.
“Right now, it’s mostly fear—people are waiting to see if tariffs will actually be implemented,” he said. “But if tariffs do go through, businesses dependent on foreign suppliers could see increased costs.”
Key concerns buyers are now evaluating:
- Will tariffs increase operating costs for a target business?
- Can price increases be passed on to customers?
- Are there opportunities to nearshore or reshore manufacturing?
Alex emphasized that businesses with diversified supply chains and strong pricing power will be better positioned to sell at premium valuations.
What Buyers Look for in a Business Acquisition
One of the biggest questions in M&A is: What makes a business attractive to buyers?
According to Alex, the number one factor is EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
“Everything flows from EBITDA,” he explained. “Revenue is great, but it’s profitability that determines value.”
Key factors buyers consider:
- EBITDA strength—Buyers look for businesses with consistent and strong cash flow.
- Adjusted EBITDA—This includes owner perks, one-time expenses, and other adjustments to reflect true profitability.
- Business independence—Buyers prefer businesses that don’t rely too heavily on the owner to operate.
- Growth potential—Companies with scalable models and market expansion opportunities attract higher valuations.
He also noted that while high-margin, high-growth businesses get premium valuations, smaller, service-based businesses can still attract interest—but typically at lower multiples.
For example:
- A business with $13 million in EBITDA might sell for 10x earnings ($130M valuation).
- A smaller business with $500,000 in EBITDA might sell for 3.2x earnings ($1.6M valuation).
Understanding these valuation metrics can help business owners position their companies for a successful exit.
M&A Deal Structures: What’s Changing in 2025?
The way deals are structured is evolving in response to financing challenges.
“Most people focus too much on the headline sale price and not enough on deal terms,” Alex explained. “The most secure way to get paid is cash at closing, but that’s not always possible.”
Common deal structures in 2025:
- Cash at closing—The most straightforward option but less common for larger deals.
- Seller financing—Owners provide a loan to buyers to help complete the deal.
- Earn-outs—A portion of the sale price is based on the business hitting future performance targets.
- Stock swaps—Sellers may accept equity in another company instead of cash.
- Hybrid structures—Many deals involve a combination of cash, seller notes, and earn-outs.
“With interest rates still high, banks aren’t financing as much debt, so more deals include seller financing or alternative structures,” he explained.
For sellers, this means being flexible and open to creative deal structures to attract more buyers and close deals faster.
Why Texas Is One of the Best M&A Markets in 2025
Texas has solidified its reputation as one of the best markets for M&A, and Alex believes that several key factors make it unique.
Why buyers and investors love Texas:
- No state income tax—A major financial advantage.
- Low cost of living—More affordability for businesses and employees.
- Pro-business policies—Fewer regulations compared to states like California.
- Strong labor force—A growing pool of skilled workers.
- Strategic location—Centrally located for national and international trade.
“Dallas-Fort Worth is one of the easiest places to do business. Unlike some states that seem to discourage M&A with regulations and taxes, Texas makes it easy for business owners to grow, sell, and succeed,” he noted.
Final Thoughts: M&A in 2025 and Beyond
Despite economic challenges, M&A in 2025 remains strong, particularly for well-run businesses in Texas.
Key Takeaways:
- M&A activity in Texas remains steady, driven by corporate relocations and private equity interest.
- Interest rates impact deal structures more than total deal volume.
- Tariffs are a wildcard, but supply chain resilience is key for buyers.
- EBITDA is the primary driver of valuation—businesses with strong cash flow get higher multiples.
- Texas remains one of the best markets for M&A, offering tax and regulatory advantages.
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