Introduction

Thank 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 first half of 2026.

Dealsuite contacted 437 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.

I Transactions

Transaction volume increased in H1-2026

The number of transactions is a key indicator of dynamism in the SME M&A market. Advisors were asked how the number of completed transactions in the first half of 2026 compares to the second half of 2025.

I Transactions

Deal mix shifts sharply toward larger transactions

The breakdown by deal value shows how transactions of different sizes are distributed across the mid-market. The deal mix has shifted decisively toward larger transactions. The share of deals above £10 million rose from 15% to 19%, a four-percentage-point increase, while deals below £2.5 million fell sharply, from 42% to 32%. The £7.5 to £10 million segment also grew, up 4 percentage points, while the £5 to £7.5 million segment remained unchanged.

II Expected Sector Shifts

Business Services holds the top spot for a third consecutive edition; Software Development flips from riser to decliner

To understand expected developments, M&A advisors were asked in which sector they foresee the largest increase or decrease in deal activity in H2-2026. Each respondent could name one sector; the three most-cited sectors are shown below.

Business Services remains the most-cited sector for expected growth, a position it has now held for three consecutive editions. IT Services enters the top three for the first time, alongside Industrial & Manufacturing. On the decline side, Hospitality & Tourism and Retail Trade continue to be named most often, both having appeared among the top decliners in recent editions. Software Development is the notable mover: after featuring among the expected risers in H2-2025, it now appears among the expected decliners.

III Assignments

Assignment volumes continue to build

An increase or decrease in assignments received by advisory firms gives insight into expected deal flow and market sentiment. This concerns assignments that came in during H1-2026 and were (partly) converted into transactions within that same period. In some cases, these assignments only lead to a deal in H2-2026, or are ultimately broken off.

47% of advisors report an increase in assignments (6% strongly increased, 41% increased), while 35% report a similar volume. 18% report a decrease. This extends the growth in assignment volume seen in H2-2025, when 46% of advisors already reported an increase, suggesting the pipeline feeding into future transactions continues to expand.

IV Sector Multiples

Average EBITDA multiple holds at 5.4

EBITDA multiples are widely used as a benchmark for business valuation, providing an indication of what buyers are willing to pay in specific sectors. Since 2015, Dealsuite has tracked average EBITDA multiples per sector, the multiple typically paid for a company within a given industry, based on enterprise value (EV).

The average EBITDA multiple across sectors stands at 5.4, unchanged from H2-2025. Business Services (+0.3 to 6.3), Media & Communication (+0.2), and Construction & Engineering (+0.2) posted the largest gains. Software Development and IT Services both eased by 0.2, though they remain the two highest-valued sectors overall. E-commerce & Webshops also eased by 0.2, while Agri & Food and Hospitality & Tourism were down 0.1.

Spread in sector multiples reflects diversity of business models

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.

V Multiples in Relation to Company Size

Company size continues to drive valuation

Company size remains a key driver of valuation. For UK&I SMEs, quantifying the Small Firm Premium is particularly relevant for businesses with an EBITDA between £200,000 and £10,000,000.

Research shows that smaller companies carry a higher risk of not realising expected free cash flows (Damodaran, 2011; Grabowski & Pratt, 2013). This higher risk profile is corrected for through the so-called Small Firm Premium, which results in a lower valuation. As a result, EBITDA multiples for larger companies are structurally higher than for smaller companies.

In H1-2026, multiples for the smallest UK&I SME companies rose further: for companies with an EBITDA of £200,000, the average multiple increased by 0.3 to 3.6. Multiples for the largest companies eased slightly, with the £10 million bracket down 0.2 to 8.2 and the £5 million bracket down 0.3 to 6.8. Multiples for companies in the £500,000 to £2 million range remained broadly stable. The gap in EBITDA multiple between companies with a normalised EBITDA of £200,000 and £10,000,000 now stands at 4.6 (3.6 vs. 8.2).

VI Cross-border Multiples

Regional valuations converge further toward the European average

Regional differences in EBITDA multiples are narrowing. In H1-2026, four regions (DACH, UK&I, Nordics, Southern Europe) stand at 5.4, two regions (France, CEE) at 5.3, and the Netherlands at 5.0. The spread amounts to 0.4. This convergence goes hand in hand with growing transparency in market and deal data. Despite this regional convergence, sector-specific valuations continue to vary considerably by region. These sectoral differences form a strong incentive for cross-border M&A and make regional transactions strategically interesting.

Average EBITDA multiple in Europe: 5.3

VII Valuation Gap

Seller expectations run too high in half of all transaction processes

Previous Dealsuite research identified unrealistic seller valuation expectations as the leading cause of terminated deals in the UK&I market. This edition asked advisors directly how often they encounter this gap between seller expectations and realistic market value, how large it typically is, and how often it ultimately breaks a deal.

In 49% of transaction processes, advisors report that the seller's value perception is too high. In these cases, the deviation between the seller's expectation and the realistic market value typically amounts to 23%. In 24% of these cases, the valuation gap ultimately leads to the deal being broken off.

VIII Average Interest per Sector

Buyer interest picks up

The average number of interested parties per listed company is a useful indicator of buyer appetite and competitive tension in a sale process. Advisors were asked how many serious buyers, on average, expressed interest in the companies they brought to market in H1-2026.

The average number of interested parties per company rose to 8.5, up from 7.9 in H1-2025, with most sectors seeing an increase in buyer interest. Interest levels continue to vary by sector, reflecting differences in demand and market dynamics across the UK&I mid-market.

IX Retrospect

Sentiment holds firm heading into H2-2026

Assessing the performance of the UK&I M&A mid-market is based on many factors, including the willingness of entrepreneurs to sell their businesses, funding availability, and macroeconomic developments. The survey asked advisors to assess the M&A mid-market in H1-2026 (retrospective).

Advisors' assessment of H1-2026 was firmly positive on balance. In total, 76% of advisors viewed the market positively (4% very positive, 21% positive, 51% slightly positive), against 24% holding some level of negative sentiment, the large majority of which was only slightly negative (17%).

X Outlook

Confidence carries into H2-2026

Looking ahead, advisors were asked what they expect from the second half of 2026, taking into account the same underlying drivers, seller appetite, financing conditions, and the wider economic backdrop, this time as a forecast rather than a retrospective view.

80% of advisors describe themselves as optimistic about H2-2026 (59% slightly optimistic, 18% optimistic, 3% very optimistic), essentially unchanged from the 81% recorded for H1-2026 in the last edition. This suggests confidence in the UK&I mid-market has settled at a high level rather than swinging from one half-year to the next. The remaining 20% hold a more cautious view, with the large majority of that group only slightly pessimistic (17%).

XI Method

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 437 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 437 advisory firms, we received 102 responses (23% response rate).

Sources used:

• A total of 102 M&A advisory firms provided detailed input based on the transactions they advised on in H1-2026.

• Dealsuite deal database (2026)

• Dealsuite M&A Monitor research Q1-2015 t/m H2-2025.

• Dealsuite. (2026). M&A mid-market trends report 2026.

• Dealsuite. (2025). European Deal Terms Report.

• Damodaran (2011). Equity Risk Premiums (ERP).

• Harding, D., & Rovit, S. (2004). Mastering the merger: Four critical decisions that make or break the deal. Harvard Business Press.

• Bain & Company. (2023, March 28). How companies got so good at M&A.

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This research was conducted by Jelle Stuij, and Roos Bijvoet. For further questions, please contact Jelle Stuij. For further information about Dealsuite, please contact Malcolm Saleeb.