As we move through 2025, the UK business acquisition market is navigating a delicate balance between resilience and reinvention. From high street consolidation to private equity reshaping entire sectors, the acquisition environment in Britain reflects both global economic uncertainty and uniquely local opportunity.
A Shifting Market Post-Brexit and Post-Pandemic
The UK economy has faced its fair share of challenges over the past five years—Brexit aftershocks, a cost-of-living crisis, and pandemic recovery. Yet, according to The Financial Times (January 2025), there’s growing optimism among dealmakers, with transaction volumes showing signs of recovery after a cautious 2023–2024 period.
One of the strongest rebounds is seen in owner-managed business sales, particularly in professional services, logistics, and niche manufacturing. Many baby boomer entrepreneurs are now looking to retire, and this generational shift is fuelling acquisition activity in the SME space. For many, the next 12–18 months represent the ideal window to exit before tax policy changes potentially impact capital gains and inheritance thresholds.
Private Equity on the Prowl
Private equity (PE) remains a dominant force. According to FT reports, UK-based PE funds have over £100 billion in dry powder, and with interest rates stabilising and inflation slowing, the pressure to deploy capital is intense.
Sectors seeing the most activity include:
- Healthcare: Following years of consolidation in veterinary practices and dental chains, PE buyers are now exploring mental health clinics and domiciliary care services.
- Technology and SaaS: Strong interest remains in B2B platforms, cybersecurity startups, and fintech solutions that can scale across European markets.
- Specialist Retail and Franchises: With large high street brands still in flux, buyers are targeting smaller chains with strong local customer bases and proven cash flows.
What’s notable is the shift from rapid growth acquisition to value and stability. PE firms are increasingly focused on cash-generating, recession-resilient businesses—a sharp contrast to the ‘growth at all costs’ strategy that defined the pre-pandemic era.
Regional Opportunity and Localised Deal Flow
Outside of London, regional hotspots like Birmingham, Manchester, Leeds, and Bristol are thriving in the M&A landscape. Professional advisory firms in these areas report increasing levels of deal interest, particularly from buyers based in London or overseas seeking more affordable acquisition targets.
According to a recent Beauhurst blog, there’s also a rise in corporate venturing and bolt-on acquisitions by mid-market firms trying to build resilience into their supply chains and service offerings. For example, two Midlands-based engineering firm recently acquired a niche automation company to future-proof its operations in the face of labour shortages. The acquired companies are Nottingham-based LAC Conveyors & Automation and Telford-based Holloway Control Systems.
Barriers Remain—But So Do Opportunities
Despite the positive signs, sellers still face a few headwinds. The valuation gap between sellers’ expectations and what buyers are willing to pay remains an issue, though this has narrowed in 2025 compared to 2023. Regulatory concerns—particularly around competition law in tech and healthcare—can also delay deals.
However, a more stable macroeconomic backdrop and stronger buyer appetite are creating a more confident environment overall. Banks and alternative lenders are returning to the M&A space, offering acquisition finance at more competitive terms.
What It Means for Buyers and Sellers
If you’re a buyer in the UK right now, it’s an excellent time to consider acquisition as a path to growth. There is increased deal flow, better access to financing, and more realistic seller pricing.
If you’re a seller, the market is open—but preparation is critical. Buyers are looking for clean financials, operational stability, and a clear exit narrative. Working with an experienced business broker can help you present your business in the best light and reach serious buyers quickly.