This episode is a little different. Rather than a dry stats read on the first half of 2026 (there’s plenty of that out there already), we wanted to get into the nitty-gritty: what the market actually feels like, where the premium is really going, and our favorite and least favorite deals of the quarter. Three parts: a market update, a POV on the premium, and the deals.
I. The Market Update, a Bifurcated Recovery
Palazzo counted about 312 announced marketing-services and digital-media transactions in Q2. (For listeners’ benefit, Palazzo puts out one of the most comprehensive quarterly reports in the category, effectively a record of every deal in a quarter; we’ll link it.) Nobody does the equivalent for commerce, which is the other channel we watch, but Christian counted about 20 there. Call it roughly 335 transactions in Q2. Luma Partners also reported ad tech public stocks bounced about 30% in the quarter, a nice hit.
One listener rightly pushed back on a prior episode’s framing that the bid-ask spread is the whole challenge in M&A right now. His point: AI disruption risk and the ability to raise debt is another common deal blocker these days. That’s true, and it speaks more to middle-and-upper-market deals than to the lower-middle market where we travel. In the lower middle market, we’re seeing deals get done, probably the highest volume of activity in the last two years, driven by strategics. To be sure, debt is an issue, but in sub $50M deals, it tends to be bid/ask spreads.
So what about valuations? A few reference points across four categories:
Marketing services (think B2B marketing agencies): median EV of ~8.87x EBITDA, per Palazzo.
Scaled ad tech: ~4.9x revenue, per Luma Partners.
Digital media and martech: a rough consensus between Palazzo and Luma around 2.2x EV.
Digital commerce software: roughly 2x ARR on the low end up to 16.9x for the highest-growth assets, with a midpoint around 4.6x (deferring to Jamin Ball at Altimeter, whose numbers match Christian’s advisory work). As a sanity check, Shopify, the public primary comp in commerce, was trading around 9x next-twelve-months revenue at quarter close.
An important nuance on that 8.87x services median: lower-market deals trade completely differently from middle-market deals. A lower-market deal is typically below $100M in total value, but as a practical matter the volume is sub-$50M EV; you don’t really reach middle market until $250M or more. Sub-$50M EV deals tend to weigh below that 8.87x, and usually come with structure, an earn-out and various forms of consideration beyond cash. Several bankers have told us they’re simply not seeing the high multiples for sub-$75M scaled businesses that were around in the past.
Strategics are still leading: about 70% of observed Q2 deals were strategic-led (whether PE-backed or not), with roughly 30% being PE platform acquisitions. That matters because PE is experiencing the longest hold periods on record. The New York Times, citing PitchBook, recently noted something like 32,500 PE-owned companies sitting and waiting for an exit. Sponsors are struggling with exit strategy and hoping the software winter ends (the rumored Workday deal is being floated as a possible beginning of the end of the software apocalypse, but it’s too early to tell). In plain terms: the biggest checks are being written by operating companies buying capabilities they want to own, not financial buyers looking to flip.
On the commerce front specifically, it’s a low-volume market. The largest Q2 deal was PayPal acquiring Cymbio for about $200M, reportedly a 15-20x deal backed on an AI buy. The others were smaller comps: Channable/Metrion, Akeneo/Pricing Hub, Fishbowl/RepFabric. And there’s still a lot of pre-2022 SaaS stuck in “AI zombie mode.” (We covered Salsify’s exit recently, but that was a July deal, so we’ll cover that next quarter.)
II. The Star Quality Thesis
Here’s Ayelet’s POV on where the premium is actually going, because that’s what sellers keep asking: how do I command a premium right now?
What’s changed is that scaled, capable, measurable results, the things that used to automatically command a premium, are now table stakes. That’s necessary, but it’s no longer enough. The premium now attaches to distinctive work, cultural relevance, audience, IP, data, distribution, trusted relationships, a reputation that’s genuinely hard to reproduce. It’s the difference between “we could build a version of this” and “we need this specific business for a reason.” That second one is the premium. Ayelet’s calling it the star quality thesis.
The analogy is sorority recruitment. When you go through recruitment with context (say, second semester, after observing behavior for a while), you get a slideshow of every candidate, and a handful have a big star next to them, the top targets. Here’s the key: each star girl came with her own risk factors. When the room debated her, the question was never whether she had risk. It was whether the risk was manageable. And most often, the risk was the very thing that made her a star.
Businesses are the same. The “it factor” that makes a target exceptional is frequently inseparable from its risk profile, dependence on key talent, a specialist position that’s hard to institutionalize, a reputation tied to specific people. The minute you sign the LOI and head into diligence (especially sponsor-backed diligence), a dark cloud settles over the it girl, and everyone starts weighting the reasons why not.
Christian’s counterpart discipline: have a thesis drafted by the time you execute the LOI that quantifies the gains you expect over the next 12-18 months at the client-account level. Which specific accounts will you cross-sell or upsell? How does this acquisition drive revenue growth? What are your upside protections, what will you gain no matter what, and what’s your downside protection? And along the way, has the seller done anything to suggest they won’t do what they say? (Sometimes sellers pivot, stop showing up to calls, or make diligence difficult, “you’re being too hard on us.” It cuts both ways.) The cautionary tale for buyers: successful M&A means having a clear thesis on the good and the imperfect, and sticking to it, rather than going all cowboy once the dark cloud looms.
III: Our Favorite Q2 2026 Deals
Favorite: Miroma acquires Ad Results Media.
What she loved is that it didn’t feel like someone woke up and said “podcasting and creator are hot, we need one of those.” It felt specific. Ad Results Media (ARM) has been in audio for more than 25 years; they started in radio, got into podcasting very early, and evolved into creator, video, streaming, YouTube, and social as the world moved. They’re the agency layer doing the planning, buying, measurement, and relationships, with the fluency to know what’s real versus not, and a strong brand roster.
So Miroma isn’t buying “more media spend.” It’s buying a specific capability and a group of people who’ve built real credibility in a fragmented part of the market. On the buyer side, Miroma has spent years building culture around entertainment, creative, performance, and specialist media, and this gets them a much deeper US presence with real performance-media capability, while ARM taps into a broader global creative and media ecosystem. The structure reinforces the thesis: Shamrock sold control but retained a significant minority stake, and CEO Jordan Fox stays on. This is a people-driven, specialist-knowledge business, a textbook star-quality asset, where the very thing that makes it special (talent, client trust, staying ahead of channel change) is also the risk. The open question is whether the buyer can protect what made it exceptional, or turns it into a more generalist media play.
This one sparked a tangent worth its own episode: podcast agencies are an under appreciated category, especially in B2B, some with real tech capabilities. Whenever Christian raises them with buyers, the response is a shrug, “not sure why that’s special.” He thinks they’re a value buy about to get a lot more attention, and Ayelet has a whole data-backed thesis on it. Stay tuned.
Least favorite: Publicis / LiveRamp.
She gets the strategy; it’s not a dumb thesis. Publicis has been performing well, and LiveRamp is real, well-known infrastructure. But if she were in the buyer’s seat, she’d be nervous about complicating the very thing being bought. LiveRamp’s historical value is that it was a trusted, relatively neutral layer, brands, publishers, platforms, and agencies could all work through it without feeling they were feeding one particular media buyer’s machine. Sitting inside Publicis, that neutrality is hard to preserve. Both companies clearly understand the concern; they’re promising operational neutrality and an independence charter around access, privacy, and pricing. But the neutrality erosion is the big risk to the value the buyer actually realizes.
Christian’s add: the deal’s value in part reflects the concern about client-base contraction. There will be some contraction on the neutrality question, and players like ID5 in the States and Roq.ad in Europe expect to benefit from that migration. In Publicis’s defense, they’re one of the better holdco tech buyers; Epsilon has done very well with acquisitions, and their agenda is getting capabilities under their roof for their largest customers deploying billions in media, an agenda that doesn’t necessarily require retaining the entire customer base. There’s some blast-radius benefit for downstream smaller players. And recall from our Marketecture episode: this wasn’t a wildly valued deal; some feel money was left on the table and there may have been better buyers. But the ship has sailed and the deal looks like it’ll close. The upside for the ecosystem: it may create new players who scale into great acquisition candidates, or combine.
Notable Favorite: Nth Degree acquires Invent (with Shamrock).
An experiential agency Christian recalls meeting at a the Canaccord Genuity Conference in 2025; thinking any scaled agency should have this business. At the water cooler, prospective buyers dismissed it as asset-heavy, capital-intensive, “you never know if clients come back.” The data proved the opposite: they run amazing events (Amazon’s events, Google’s events, major tech and shareholder conferences), and the clients come back. He was surprised the market underrated the quality, and glad to see Shamrock and Nth Degree bring it under their roof, especially given how well experiential, media, and creative play together.
Why did buyers miss it? This is a PE-sponsored deal, and we’re back to the meta-theme of the era: sponsors are in super-long hold periods and are wary of businesses that filter like sand through their hands. Many looked at Invent as a platform, and those eyeing it as an add-on found it a touch too large and not growthy enough to underwrite at a price attractive to the exiting founders. But Shamrock is a good buyer that knows how to operate in uncertain times, and with PE distributions at their lowest level in a long while, a good buyer acting decisively makes this a credible deal. It was Ayelet’s second favorite, too.
Q2 Takeaway
It’s not “M&A is back.” It’s that the market has gotten selective, differentiated, and hard to recreate. The best assets are having a completely different quarter than the middle of the market, whether that’s a specialist audio agency or the plumbing of AI-driven commerce. In an AI world, the it factor and the trusted relationship are the scarce things, and that’s exactly where the premium is going.
As a reminder, foundational subscribers get a 30-minute advice call or virtual session with Ayelet and/or Christian on an M&A question. It’s our way of giving back to our supporters and making M&A in commerce and media better.
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Connect with Christian and Ayelet
Ayelet’s LinkedIn: https://www.linkedin.com/in/ayelet-shipley-b16330149/
Christian’s LinkedIn: https://www.linkedin.com/in/hassold/
