August 2026

UK M&A in 2026: the market is moving again – but it is not a boom

A mid-year view of activity, valuations and the new rules of execution

There is a temptation in M&A, as in economics, to mistake the noise of a few very big numbers for the sound of a broad recovery. In Britain in 2026, that would be a mistake. The market is moving again, but selectively: capital is available, buyers are active and pipelines are rebuilding. Yet only the strongest businesses are enjoying anything resembling a sellers’ market.

The economic backdrop is certainly less bleak. UK GDP grew by 0.4% in the second quarter, after 0.6% in the first; CPI inflation eased to 2.6% in June; and Bank Rate is 3.75%. Financing is neither cheap nor effortless, but it is more predictable than it was.

The official completion data still offer a warning against exuberance. The ONS recorded 352 acquisitions involving a change of majority ownership in the first quarter, down from 495 in the final quarter of 2025. Inward acquisitions fell to 163 and domestic deals to 117. These figures are provisional and inevitably look backwards, but they are hardly evidence of an indiscriminate boom.

The mid-market, however, looks more animated. Dealsuite’s August survey of 437 UK and Irish advisory firms found that 38% reported an increase in completed transactions in the first half, against 17% reporting a fall. 47% saw assignments increase, while average buyer interest rose from 7.9 to 8.5 parties per company. Most strikingly, deals above £10 million increased from 15% to 19% of transactions, while those below £2.5 million fell from 42% to 32%. Demand has not disappeared; it has moved up the quality and size curve.

Other datasets tell the same story from different angles. EY found that disclosed UK financial-services deal value rose from £4.2 billion to £33.7 billion in the first half – but seven deals above £1 billion accounted for roughly 93% of the total. KPMG recorded 888 UK private-equity deals, 3.4% fewer than a year earlier, with second-quarter volumes down 10%. Bolt-ons made up 61.8% of activity, while the value of completed exits doubled to £23.4 billion. This is a market of strategic necessity and selective consolidation, not universal confidence.

Price is where optimism collides with reality. Dealsuite’s average mid-market EBITDA multiple was unchanged at 5.4, but the range was wide: 8.0 for software development, 6.3 for business services, 4.1 for construction and engineering, and 3.5 for retail. Scale mattered just as much. The average multiple rose from 3.6 for a business making £200,000 of EBITDA to 8.2 at £10 million. Yet advisers said sellers’ expectations were too high in 49% of processes, by an average of 23%; almost a quarter of those mismatches killed the deal.

Nor are deals becoming easy. Ideals reports that average execution time fell 4% to 253 days, the quickest since 2022, while hours spent in the data room increased by 8%. Transactions are being compressed, not simplified. AI is helping: in a Datasite and FT Longitude survey of 1,000 dealmakers, half were using it regularly or had embedded it in due diligence. Even so, 45% believed the final signing decision should remain entirely human.

So the window is open, but it is narrow and conditional. The sellers most likely to win will not be those waiting for a mythical return to 2021 pricing. They will be those who arrive early with reliable earnings, a defensible market position, a credible growth story, clean information and a realistic view of value.

In 2026, preparation is not merely the prelude to a deal. It is one of the assets the buyer is paying for. And we are seeing this within our own boutique, with over 50% of our current effort focused on preparatory work to bring our client’s business to the point of exit-readiness.

If you want to understand what it might take to prepare your business for a potential exit contact us today.

Tags: business services, clean information, consolidation, construction, credible growth, defensible market position, engineering, realistic view of value, reliable earnings, scale mattered, software development, strategic