Research papers
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Jelle Stuij
Download ReportThank you for taking the time to read this twelfth edition of the UK&I M&A Monitor. This report consolidates research performed by Dealsuite, the leading UK&I and international platform for M&A transactions. It contains statistics and trends for the UK&I M&A mid-market (enterprises with a revenue between £1 million and £200 million) over the second half of 2025.
Dealsuite contacted 435 M&A advisory firms operating within the UK&I M&A mid-market.
The aim of this study is to create periodic insights that improve the UK&I market’s transparency and to serve as a benchmark for M&A professionals. We are convinced that sharing information within our network leads to an improved quality and volume of deals.
Increase in the number of transactions in H2-2025
After years of volatility, uncertainty is the new normal in the M&A market. Dealmakers, particularly in the SME segment, are proving resilient and well-adapted to this structural change. To safeguard transaction progress in an unpredictable market environment, dealmakers are increasingly applying flexible deal structures. According to the Dealsuite M&A Deal Terms Report, there is a clear increase in the use of deferred payments and other forms of risk-sharing. In the first half of 2025, transaction volume remained stable compared to the end of 2024. In the second half of 2025, sentiment leaned slightly positive, with moderate increases outweighing reported declines.
Shift toward smaller deals reshapes deal distribution in H2-2025
In the second half of 2025, the deal mix shifted toward smaller transactions compared to the first half of the year. The share of deals below £2.5 million increased sharply from 33% to 42% (+9 percentage points), reinforcing the dominance of smaller deal sizes.
The £2.5– £5 million and £5– £7.5 million segments saw modest growth (+3 and +3 percentage points respectively). Deals of £10 million or above dropped from 25% to 15% (–10 percentage points).
Business Services is expected to drive transaction growth in H1-2026
To assess expected market developments, M&A advisors were asked which sectors they anticipate to have the largest increases or decreases in deal activity during the first half of 2026. Each respondent selected one sector. The results are presented in two charts, highlighting the three sectors most frequently cited for expected increases and decreases in transaction volumes.
When asked which sector is expected to see the largest increase in transaction volume, M&A advisers largely reaffirmed their H1-2025 views: Business Services and Software Development remain the top pick, while Healthcare & Pharmaceuticals has been replaced by Industrial & Manufacturing.
Expectations regarding declining transaction activity remain concentrated in a limited number of sectors. Similarly to H1-2025, M&A advisors identified Retail Trade as the sector likely to see the largest decrease in deal volume in H1-2026, followed by Hospitality & Tourism and Construction & Engineering.
Substantial increase expected in the number of M&A transactions
An increase or decrease in assignments received by advisory firms provides insight into expected deal flow and market sentiment. After an upward trend on the number of assignements in the first half of the year, advisors stated the same trend for H2-2025. The results are shown in Figure 5 below.
These are assignments received in the second half of 2025 and (partly) converted into transactions during the same period. In some cases, these assignments will not lead to a deal until H1-2026, or will still be terminated.
In H2-2025, 46% of advisors reported an increase in the number of transactions compared to H1-2025. 12% of advisors noticed a drop, while 42% of the advisors reported no change in the number of assignments.
Increase in average EBITDA multiple reported
EBITDA multiples serve as a widely accepted benchmark for business valuation, offering insight into what buyers are prepared to pay across different sectors. Since early 2015, Dealsuite has published semi-annual updates on average sector multiples, reflecting the typical EBITDA multiple paid for companies within each industry.
For this study, respondents provided their current observations of EBITDA multiples, informed by their adjusted market insights. These findings, shown in Figure 6, represent multiples based on the enterprise value (EV) of the acquired companies.
The average EBITDA multiple increased to 5.4. Most sector multiples followed this upward trend, though the Healthcare & Pharmaceuticals sector saw a slight decline from 7.6 to 7.5, as did the Agri & Food sector, dropping from 5.3 to 5.2.
Biggest spread reported in the Retail Trade sector
A business valuation is inherently company-specific and depends on a wide range of factors, including growth prospects, profitability, market position, and risk profile. A multiple, on its own, does not constitute a complete valuation methodology, but it serves as a useful cross-check, particularly when assessing comparable transactions in the near term.
Figure 7 illustrates the distribution of EBITDA multiples by sector. Some sectors encompass a wide range of companies, which explains the broader spreads compared with sectors composed of more similar businesses. The table shows the typical range of EBITDA multiples per sector, though individual transactions can occur at significantly higher or lower levels.
To provide a representative view of a typical company within each sector, the range has been adjusted to exclude the two largest outliers per sector.
Significant difference in multiples for large and small companies
The size of a company plays a crucial role in determining multiples in business valuation. For small and medium-sized enterprises (SMEs) in the UK, it is essential to accurately quantify the impact of the Small Firm Premium. This is particularly relevant for businesses with an EBITDA ranging from £200,000 to £10,000,000.
Studies have shown that smaller companies face a higher likelihood of not achieving their expected cash flows (Damodaran, 2011; Grabowski and Pratt, 2013). The elevated risk premium associated with smaller businesses, known as the Small Firm Premium, leads to a reduction in value. As a result, EBITDA multiples for larger companies tend to be higher on average compared to those for smaller companies.
The results of this research confirm again that companies with a low EBITDA have a lower multiple than companies with a high EBITDA. The influence of company size on EBITDA multiples paid is presented in Figure 8. The difference in the EBITDA multiple between companies with a normalised EBITDA of £200,000 and £10,000,000 is 5.1 (3.3 compared to 8.4).
For companies with an EBITDA below £200,000, we do not determine a multiple for the following reasons:
A comparison of EBITDA multiples between different countries highlights the advantages of cross-border deals. For example, it can be beneficial to buy a particular company abroad or to sell a company to an international buyer. Figure 9 shows the differences in EBITDA multiples between European markets.
Half of sales processes have a duration of 6 to 12 months
The duration of a sale process is influenced by factors such as market complexity, the seller’s level of preparation, and financing pressure on buyers. The lead time of a transaction, from obtaining mandate to deal closing, can vary significantly.
The lead times of sale processes are distributed on a percentage basis across the categories shown in Figure 10. The vast majority (80%) of sales processes guided by an M&A advisor had a duration of less than 12 months.
Age is the most common reason for selling a business
A company sale can be initiated for a wide range of reasons. In some cases, age plays a role and there is no suitable succession, while in others the objective is to secure the financial value built up over time. In different situations, there may be a need for a new type of management to guide the company into its next phase of growth. In short, the underlying rationale varies by entrepreneur and circumstance.
M&A advisory firms were asked to identify the primary reasons for a company sale. The following reasons collectively total 100% and are presented in Figure 11.
The average age of a selling entrepreneur has decreased
Age (and lack of succession within the family or within the company) remain the main reasons for selling a business, at 41%. The advisors were also asked about the average age of a selling entrepreneur, and what the average age was 10 years ago. Over the past ten years (2015-2025), the average age has dropped from 59 to 56.
Positive assessment of H2-2025 and optimism for H1-2026
Assessing the performance and outlook of the UK&I M&A mid-market is influenced by a range of factors, including seller willingness, access to financing, valuation expectations, and broader macroeconomic conditions. To capture both current sentiment and forward-looking expectations, M&A advisors were asked to assess the market in H2-2025 (retrospective) and provide their expectations for H1-2026 (projection).
The retrospective assessment of sentiment toward H2-2025 reflects a moderately positive market environment. In total, 66% of advisors viewed the market as positive, while the remaining 34% held some level of negative sentiment, most of which was slightly negative.
Looking ahead, the vast majority of M&A advisors (81%) have positive expectations for H1-2026. Pessimistic views decline significantly compared to the H1-2025 assessment.
The majority of M&A transactions take place in the mid-market. This M&A Monitor uses the definition of a mid-market company as having a revenue between 1 and 200 million pounds. The survey that was the basis for this M&A Monitor was sent to 435 M&A advisory firms. Considering their combined input, they represent an essential part of the M&A mid-market in the UK&I. Out of the total of 435 advisory firms, we received 106 responses (24% response rate).
Sources used:
This research was conducted by Jelle Stuij, and Roos Bijvoet. For further questions, please contact Jelle Stuij. For further information about Dealsuite, please contact Sofia Balali.
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