UK M&A Insights | 2026
The market for buying and selling UK businesses is changing.
Private equity-backed consolidation continues across fragmented industries. Technology is influencing how businesses are valued. International buyers continue to look at UK companies, while new types of acquirers are becoming increasingly visible in the SME market.
For business owners considering a sale and buyers looking for opportunities, understanding these trends can help identify where the market may be heading.
Here are some of the key trends to watch.
1. Buy-and-build strategies are creating more SME buyers
Private equity-backed buy-and-build strategies continue to be an important feature of the UK M&A market.
The model is relatively simple.
An investor backs an initial business, often referred to as the platform, and then uses further acquisitions to increase its scale, geographic coverage, customer base or service offering.
For example, a national group might be created by acquiring a strong regional business and subsequently buying a series of smaller competitors around the UK.
For SME owners, this matters because the potential buyer may no longer be an obvious direct competitor.
It could be a PE-backed group that didn’t exist in its current form a few years ago.
This is particularly relevant in fragmented markets where there are large numbers of independent businesses.
2. Buyers are becoming increasingly selective
There is still significant capital available for acquisitions, but buyers aren’t deploying it indiscriminately.
PwC reported that UK M&A deal value increased significantly during the first half of 2026 while the number of announced transactions declined.
That points to a market where capital is available but increasingly concentrated.
For SMEs, buyers are likely to look closely at the quality behind the headline numbers.
Two businesses generating the same EBITDA can attract very different levels of interest.
Factors including recurring revenue, customer concentration, margins, management strength, owner dependence and future growth potential can all influence how buyers assess an opportunity.
3. Quality of earnings matters more than headline growth
Fast growth can attract attention.
But buyers increasingly want to understand how that growth is being generated.
Is revenue recurring?
Are customers staying?
Are margins sustainable?
Has growth required significant additional working capital?
Is one customer responsible for a large proportion of the increase?
A company growing at 15% with high customer retention, good margins and predictable cash generation may be more attractive to some buyers than a company growing at 40% with volatile revenue and weak cash conversion.
For sellers, demonstrating the quality and sustainability of earnings is becoming increasingly important.
4. Technology will affect valuations outside the technology sector
Technology and AI are no longer relevant only to software companies.
Buyers increasingly need to consider how technological change could affect almost any business they acquire.
That creates both opportunity and risk.
A business that has successfully used technology to improve productivity, margins or customer experience may become more attractive.
Another business may face questions if a significant part of its service could potentially be automated or disrupted.
Buyers may increasingly ask:
How does technology affect this business?
Could AI improve its margins?
Could technology make its services easier to replicate?
Does the company have proprietary systems, data or intellectual property?
And what investment will be required over the next five years?
For owners thinking about a future sale, technology strategy is becoming part of exit preparation.
5. Succession will continue to create acquisition opportunities
Many SME transactions aren’t driven by poor performance.
They happen because an owner wants to retire, reduce their involvement or realise some of the value they have created.
This creates an important source of acquisition opportunities.
A profitable business may have operated successfully for decades but have no family member or management team ready to take over.
Selling to another business, investor or entrepreneur can provide a succession solution.
For buyers, these situations can provide access to established companies that might otherwise never come to market.
For sellers, succession planning early can make the eventual transition considerably easier.
6. Individual entrepreneurs are becoming a more visible buyer group
Buying an existing company rather than starting one is becoming a more recognised route into business ownership.
Search funds are one example, but the trend is broader.
Experienced executives, former founders and entrepreneurs are increasingly looking for established companies they can acquire and operate.
The attraction is understandable.
Instead of starting with an idea and trying to find customers, the buyer acquires an existing organisation with employees, revenue, customers and infrastructure already in place.
This creates another potential exit route for SME owners, particularly where the company is profitable but too small to attract larger institutional buyers.
7. International buyers will continue to look at UK businesses
UK businesses continue to attract overseas acquirers.
For international companies, acquiring an existing UK business can provide an immediate route into the market.
Rather than building operations from scratch, they can acquire customers, employees, supplier relationships and local market knowledge in a single transaction.
Specialist UK businesses can also be attractive where they have intellectual property, technical expertise, strong brands or positions in niche markets.
For sellers, this means the potential buyer universe doesn’t necessarily stop at the UK border.
8. Deal structure will remain an important part of negotiations
The headline purchase price is only one part of an acquisition.
Buyers and sellers can use transaction structure to bridge differences in valuation or manage uncertainty.
For example, a £5 million transaction might include:
£3.5 million paid at completion
£750,000 of deferred consideration
Up to £750,000 through an earn-out
For the seller, the headline value is £5 million.
But the amount received at completion is considerably lower.
Understanding the structure of an offer is therefore just as important as understanding its headline value.
Deferred consideration, earn-outs, vendor finance and retained equity are all likely to continue playing a role in SME transactions.
9. Preparation will increasingly separate the most attractive businesses
As buyers become more selective, businesses that are properly prepared for sale can stand out.
Clear management accounts.
Documented customer relationships.
A strong management team.
Well-organised contracts.
Supportable EBITDA adjustments.
A credible growth plan.
Limited owner dependence.
None of these guarantee a successful transaction.
But they make it considerably easier for a buyer to understand the company and gain confidence in what they’re acquiring.
Owners considering a sale in the next few years don’t need to wait until the business is formally on the market to begin preparing.
10. The SME acquisition market will become more connected
Historically, the UK SME market has been fragmented.
Business owners may know the obvious competitors in their sector but have little visibility of private equity-backed groups, search funds, individual acquirers or investors looking for businesses like theirs.
Buyers face the opposite problem.
Finding good acquisition opportunities can involve searching multiple marketplaces, building relationships with brokers and advisers, approaching owners directly and relying heavily on personal networks.
Technology has the potential to make this market more connected.
Better buyer profiles, structured business information and improved matching between buyers and sellers can make it easier for relevant parties to discover each other.
That doesn’t remove the importance of advisers or relationships.
M&A will always involve people.
But the way those people find each other can improve significantly.
What does this mean for business owners?
If you’re considering selling in the next few years, don’t focus solely on today’s valuation.
Think about what the business could look like when you eventually go to market.
Could you reduce dependence on yourself?
Improve recurring revenue?
Diversify the customer base?
Strengthen management?
Improve reporting?
Use technology more effectively?
Small changes made over several years can materially change the type of buyer a business attracts.
What does it mean for buyers?
The buyer market is becoming more competitive and more diverse.
Trade buyers, private equity-backed companies, search funds and individual acquirers can increasingly find themselves looking at the same opportunities.
That makes having clear acquisition criteria important.
Know what you want to buy.
Know what you can afford.
Understand how you’ll fund it.
And build relationships before the perfect opportunity appears.
The UK SME market contains a huge number of established businesses, many of which will change ownership over the coming years.
The opportunity is connecting those businesses with the right next owner.
Discover opportunities on The Brokerage
The Brokerage brings together business owners, buyers, brokers and investors across the UK business acquisition market.
Sellers can present their businesses to relevant acquirers, while buyers can create a profile defining exactly what they’re looking to acquire. As the market becomes more connected, The Brokerage is designed to make it easier for the right opportunities and the right buyers to find each other.