Dutch TMT Sector: M&A shifts towards selectivity and value creation

Casper Scheffer, TMT Deals Leader at PwC Netherlands observes: 'AI is now a constant in conversations, influencing how companies perceive opportunities and risks. This results in varied valuations. Some see potential and are willing to pay higher multiples, while others tread carefully. The market is more selective, and differentiation is key.' 

IT Services: consolidation with focus on integration

The Dutch IT services landscape continues to consolidate, but the strategies for success are evolving. While market fragmentation still presents opportunities for scale, intensifying platform competition is inflating the cost of add-on acquisitions and compressing returns. Organic growth can no longer be taken for granted. 

Today, value creation hinges on increasingly on post-deal execution. Leading platforms distinguish themselves through robust back-end integration—achieving unified client databases, optimizing vendor relationships, and establishing clear commercial positioning.  

According to Lorenzo Casciscia, IT Services specialist at PwC EMEA, a focused vendor strategy consistently outperforms broad, generalist approaches. Sector specialization is equally critical; as verticalization emerges as a key differentiator and value driver, it mirrors the trajectory seen in the software sector. Deep customer insight and a sharp focus are proving essential for growth in an increasingly challenging market. 

The most successful players combine these elements with precise client segmentation—delivering bespoke solutions for large enterprises and integrated service offerings for SMEs. 

Software: data ownership as the key differentiator

In today’s software market, data ownership is emerging as the primary differentiator. As highlighted by Jeroen de Visser, IT Software specialist at PwC EMEA, organisations are increasingly demanding sector-specific software solutions that provide direct access to data, rather than acting as mere orchestration layers over third-party sources. This direct access enables real-time insights and more robust governance, which are now commanding premium valuations in the market. 

Traditional SaaS models are facing headwinds as AI-driven productivity gains reduce the need for seat-based licensing, prompting public markets to adjust their expectations. Corporate acquirers are also reshaping the landscape by bringing software capabilities in-house to strengthen their data-driven value chains—NXP’s acquisition of TTTech Auto is a notable example. Strategic AI investments, such as ASML’s partnership with Mistral AI, further underscore the critical role of software and data capabilities in securing long-term competitiveness. Intentional spending on AI is key, as costs can ramp up quickly while returns for many use cases remain uncertain.

‘Companies that prioritize direct data access and robust governance are best positioned to capture value in this evolving landscape,’ notes Jeroen, reflecting the strategic imperatives facing both software vendors and their clients. These dynamics are contributing to growing valuation dispersion across the sector, 

Valuation polarization

Selectivity is creating clear winners and losers. Companies with strong growth profiles and differentiated strategic positioning are achieving high valuations. Others face lengthy processes or deals that never close. 

This polarization signals a broader market recalibration: undifferentiated assets are being repriced, while scarce capabilities command premiums. 

Data infrastructure: ownership transfers as the new deal driver 

Grid capacity constraints and regulatory barriers are limiting new data center construction. As a result, M&A activity is increasingly focused on ownership transfers of existing facilities, as highlighted by Deepak Chadha, Datacenter specialist at PwC NL. Many organisations still operate on-premises data centers that are not future-ready. Specialized operators can manage these assets more efficiently, sparking a wave of divestments and acquisitions. 

NorthC stands out as a prime example of this trend. Originally established as the internal datacenter division of Dutch telecom giant KPN, NorthC was formed through the merger of KPN’s NLDC assets and The Datacenter Group in 2019. Under new ownership, NorthC rapidly expanded its footprint across the Netherlands, Germany, and Switzerland, operating more than 25 data centers with 140+ MW of secured capacity. Its transformation from a telecom-owned internal asset to an independent, pan-European leader demonstrates how strategic ownership change can unlock value, drive expansion, and foster innovation in the sector. 

Alternative transaction structures are gaining ground. Models that separate infrastructure ownership from usage are becoming more common. Co-investment vehicles and long-term capacity contracts allow diverse capital participation, offering flexibility that traditional acquisition structures can’t. 

Telecommunications: collaboration over transactions 

The Dutch telecommunications sector is already highly consolidated, with three main players. The peak of fiber investment has passed; operators are now seeking collaboration to avoid duplicate network buildouts. 

Large-scale transactions or restructurings have been scarce in recent years. The sector was in a holding pattern whilst fiber networks were rolled out, with capital discipline and operational efficiency taking precedence over deal activity. This is expected to change soon with several IPOs anticipated. 

Media and content: business models under pressure 

Dutch media and entertainment companies are struggling to compete with global platforms. AI is speeding up content production while lowering costs, reducing entry barriers and pressuring traditional revenue models. This creates uncertainty around both content and advertising income streams.  

At the same time, AI apps and agents are becoming an important gateway to content. As discovery shifts to AI generated answers, publishers lose direct traffic and first-party data. Some advertising value and bargaining power is expected to move from content owners to AI-driven distribution platforms.   

A clear divergence is emerging in educational content. Providers focused on mandatory, certified training retain value. For non-mandatory content, value is shifting towards distribution and learning platforms rather than content creators.