IT Services Dealmaking Held Steady at 449 Mergers Worth $14.8 Billion in First Half of 2026

The IT services deal machine kept running in the first half of 2026, with 449 mergers and acquisitions worth about $14.8 billion, according to a report from EY India.

That volume is basically flat compared to the 456 deals recorded in the first half of 2025, according to the same EY India report. Companies are still buying and selling, just being pickier about what they buy.

Strip out the seven largest transactions and the picture changes fast. Disclosed deal value outside those mega-deals drops to roughly $4.5 billion, EY India found. A handful of massive deals are propping up the headline number, while the broader market is smaller, more selective, and more disciplined than the topline figure suggests.

Where the money went

Cloud services, data and analytics, cybersecurity, and managed services led deal activity, according to the report. That's not a surprise. Every company on earth is trying to figure out how AI fits into its business, and buyers are shopping for firms that already have the infrastructure and client relationships to plug AI into real operations rather than PowerPoint decks.

Shivani Nagpaul, Partner in Investment Banking, Technology at EY India, said: "While AI is shaping virtually every acquisition discussion today, buyers continue to focus on fundamentals such as client relationships, sector expertise and delivery scale." She added that those capabilities are "increasingly being evaluated through an AI lens, as companies position themselves to compete for large-scale transformation programmes."

Buyers aren't handing out premiums just because a target slapped "AI-powered" on its pitch deck. They still want proof of paying customers, technical depth, and the ability to actually deliver at scale. That's a healthier standard than the speculative frenzy that's defined a lot of AI-adjacent investing over the past two years.

Who's buying and why

Strategic buyers, meaning operating companies rather than financial investors, accounted for about 47% of deal volume, per EY India. These are firms buying competitors or complementary businesses to expand geographic reach and deepen technical capabilities.

Private equity is still very much in the game. PE-backed roll-up transactions made up 36% of volume, and direct private equity investments accounted for another 17%, according to the report. PE firms are running consolidation plays, especially targeting niche, founder-led businesses across the U.S. and Europe.

That PE activity is about to intensify. EY India's report notes that private equity platforms built between 2020 and 2022 are now entering their exit phase. Firms that bought up IT services companies during the pandemic-era boom are looking to cash out. The report says assets with real scale, sector specialization, and strong standalone economics are best positioned to attract buyer interest when that exit wave hits.

Healthcare and finance in the crosshairs

EY India's report singles out healthcare and financial services as sectors likely to see continued acquisition interest, citing the regulatory complexity of those industries and the demand for AI-enabled transformation work. Regulated industries need specialized expertise to deploy AI responsibly, and that expertise commands a premium.

Buyers aren't just hunting for AI capability in the abstract. They want AI capability married to deep knowledge of specific, high-stakes industries where mistakes are expensive and compliance isn't optional.

What happens next

EY India's report forecasts that IT services M&A will stay active but selective for the rest of 2026. That's a fairly cautious call given the mixed signals in the underlying economy. The report itself notes softer discretionary spending, macroeconomic uncertainty, and AI-driven disruption as headwinds companies are navigating even as deal volume holds up.

The open question is what happens when that wave of 2020-22 vintage private equity assets actually hits the market for exit. If EY India's read is right, only the strongest performers, meaning companies with real scale, sector depth, and durable client relationships, will command strong prices. Weaker assets built during the cheap-money era may struggle to find buyers willing to pay pandemic-era multiples in a market that's clearly gotten more disciplined about what AI hype is actually worth.