M&A Market update Q1-25
According to Pitchbook’s latest report on Global M&A activity, in Q1-25, the first quarter of 2025, the global mergers and acquisitions market surged robustly, buoyed by a wave of large-scale deals reaching $1.05 trillion across more than 12,000 transactions.
This heightened deal activity suggests favourable conditions for UK firms, particularly privately owned businesses considering a sale. North America dominated the headlines, securing 80% of the top deals, underscoring strong international investor appetite that UK private businesses could capitalise upon.
However, UK firms should remain mindful of geopolitical tensions and tariff risks, especially considering US tariff threats under President Donald Trump. Such trade uncertainties could impact valuations and investor confidence in industries reliant on cross-border trade, particularly manufacturing, consumer goods, and services sectors.
Valuations in both North America and Europe have stabilised at pre-pandemic levels, with median enterprise values relative to earnings (EV/EBITDA) around 9.6 times. Caution should be taken with this value, as this incorporates all sizes of company sales up to the ‘billions’ – the value for the low – mid-cap space will be lower.
This market stability indicates a balanced valuation environment, attractive for UK privately owned companies looking to exit at fair market rates without the excessive volatility seen in recent years.
Europe’s M&A landscape remains solid, despite a sequential dip from the end of 2024, highlighted by Prosus’ acquisition of Just Eat Takeaway.com for €4.1 billion. This reflects continued interest in consolidation, particularly in sectors experiencing competitive pressures or those ripe for strategic integration.
Privately owned UK firms in rapidly evolving sectors like technology, healthcare, and consumer services may find opportunities to attract buyers looking for growth and strategic synergy.
Moreover, the slight decline in public market multiples suggests that privately owned businesses might offer attractive alternatives for investors seeking stable returns. Despite recent market volatility temporarily dampening IPO activity, the widening gap between public and private valuations could enhance the appeal of privately held UK businesses poised for sale.
UK firms, especially privately owned enterprises eyeing an exit, should carefully monitor sector-specific trends and geopolitical developments to optimally time their market entry. Strong sector-specific momentum in technology, especially semiconductors and cybersecurity, presents promising exit opportunities for businesses positioned in these growth areas.
Overall, while market sentiment remains cautiously optimistic, UK private businesses looking for buyers are advised to navigate these conditions carefully, leveraging favourable valuations and targeted sector strength while remaining vigilant of broader economic and political uncertainties.
Contact us now to discuss how this latest Q1-25 report might affect your potential company sale.
Tags: M&A, Market Update, Q1-25
