M&A Market UK 2026: The Real Shape of Dealmaking
August 21st 2026 | Posted by Ben Spragg
Darren Hodson and David Crump from PKF Smith Cooper Corporate Finance joined our August Virtual Boardroom to talk through where the UK M&A market actually stands in 2026, and the picture they painted was more layered than the headlines suggest.
Between them, Darren and David have advised on hundreds of company sales, and the session felt less like a sales pitch and more like a working read of what is happening on the ground in mid-market dealmaking right now.
“The high-level message is that values this year are at a record pace, but volumes are lagging behind,”
M&A Deal Value Versus Deal Volume: The Widening Gap
That gap between value and volume is the story of the UK M&A market right now. Year to date figures put deal value at around £179 billion, which on a pro-rata basis could push towards £350 billion by year end and beat the previous high set back in 2015. Yet volumes in the first quarter were down 30% on the prior year. Big deals are doing the heavy lifting. Mega transactions, particularly in financial services, have skewed the value numbers upward while the steadier flow of smaller and mid-sized deals has thinned out.
Darren linked much of that thinning to confidence rather than appetite. Political uncertainty, a change in Labour leadership and general caution among UK sponsors have all played a part in pulling deals off the table or delaying them. Overseas buyers have not shared that hesitation, as a striking 86% of deals by value this year have gone to overseas acquirers, with more than half coming from the US and a growing wave from Sweden, Ireland and Germany.
Where M&A Activity Is Concentrated This Year
Financial services, particularly wealth and asset management, has been the clear standout sector for M&A activity in 2026, helped along by a run of large sponsor-backed deals. Technology and infrastructure remain active too, though software valuations have come under pressure as buyers weigh up the disruptive potential of AI on recurring revenue models.
A few other sectors came up during the session as worth watching:
- Business and professional services, where PE-backed consolidators drive trade activity
- Industrials, described as steady rather than hot, accounting for roughly half of transactions with professional services
- Construction and house building, subdued and largely limited to distressed or strategic acquisitions
- Accountancy and legal services, where recurring revenue commands stronger multiples than transactional practices
Why the Mid-Market M&A Story Looks Different from the Headlines
David Crump made the point that while the big number statistics sit in the mega deal zone, it is the SME market, owner-managed businesses and mid-corporates driving the bulk of transaction volume.
“The SME market, OMB and mid-corporates is where the bulk of deal volume is still being seen. It’s the SME market that is driving the volume activity,”
On multiples, the average across sectors sits at around 6 times EBITDA for deals where underlying EBITDA is above £1 million, dropping by roughly one and a half times for smaller businesses below that threshold. Both speakers agreed that sector matters less than the individual business. Recurring revenue, contracted income and scalability move the needle far more than which industry a business sits in.
Debt Markets and Exit Timing
Debt markets came up too. The Bank of England base rate sits at 3.75%, down from a peak of 5.25%, though Darren admitted the falling rate has not driven the pickup in M&A activity many expected. What has changed is the funding mix. Around 70% of credit transactions now come from non-high street lenders, debt funds and challenger banks rather than traditional high street banks, a shift both speakers called a genuine structural change in how mid-market deals get financed.
The session closed on why owners transact. Lifestyle changes, retirement, succession planning and goal incongruence around the boardroom table remain the usual internal drivers, while capital gains tax speculation ahead of the autumn Budget and wider macroeconomic uncertainty shape timing decisions from the outside. Darren’s warning to business owners was blunt, claiming that waiting too long for the perfect moment tends to leave sellers on the back foot rather than the front foot, and that remains one of the most common mistakes he sees in the M&A market today.
In Summary
For business owners and finance leaders weighing up an exit, the message from this boardroom was one of cautious confidence. The UK M&A market has its challenges, but underneath the volatility, quality businesses with clean financials and credible growth stories are still finding buyers willing to pay a fair price.
