The UK M&A market in 2025, so far, has demonstrated resilience and has seen deal volumes at a similar level to 2024, according to initial data from MarktoMarket. While activity levels have fallen short of the exceptional 2021-2022 period, the M&A market has remained active and deal volumes have been stable.

Deal Volumes: A Return to Normal

Deal volumes in 2025 tracked ahead of 2023 and approached 2024 levels, suggesting the market has found its footing after post-COVID volatility. The exceptional years of 2021 and 2022, driven in part by COVID-inspired technology and healthcare deals, now appear as outliers rather than the new normal. When averaged across 2021-2023, volumes align closely with 2025 figures, reinforcing this normalisation trend.

In 2025, the market displayed predictable seasonality, with activity building toward the April tax year-end, dipping through summer, and rising again in the build up to the year-end. Notably absent this year was the dramatic October spike seen in 2024, when uncertainty around budget changes drove rushed completions.

Valuations Under Pressure

EBITDA multiples have compressed significantly since their 2021 peak, declining from 7.5x to 6.0x in 2023, before recovering somewhat into a range between 6.0-6.5x. This compression correlates with rising interest rates, which have impacted valuations through higher discount rates and reduced debt availability. The adjustment period may also have been a natural narrowing of the price expectation gap between buyers and sellers, as vendors adapted to market realities.

Hot Sectors and Consolidation Trends

Several sectors emerged as M&A hotspots in 2025:

Wealth Management and IFA remained highly active, with private equity-backed consolidators like Perspective continuing aggressive acquisition programs targeting smaller practices.

Accountancy saw sustained activity from established players like Azets and newer platforms including TC Group and Dains, with PE backing driving the majority of deals.

Legal Services experienced growing M&A interest, with private equity increasingly targeting compliance-focused firms offering recurring revenue streams.

Fire Safety and Security and Cybersecurity attracted attention for their compliance-driven, repeatable revenue models.

Care Homes showed dramatic acceleration in 2024-2025, though notably this sector’s consolidation was less PE-driven than others, with profitable private operators like Strong Life Care actively acquiring smaller facilities. Many smaller operators may lack the resources to implement new technologies that larger care homes are adopting.

The Private Equity Factor

While direct PE platform investments softened from 2021-2022 peaks, portfolio company bolt-ons remained robust. PE-backed buyers dominated active acquirer lists across wealth management, accountancy, and professional services sectors, bringing institutional capital to bear on businesses previously considered too small for PE attention.

Looking Ahead

The 2025 market demonstrated that despite multiple compression and political uncertainty, deal activity remains healthy. The normalisation of volumes (from the exceptional years of 2021 and 2022), combined with ongoing sector consolidation and PE-driven buy-and-build strategies, suggests a stable foundation for continued M&A activity into 2026.

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