The UK M&A market has stayed busy in 2026, but buyers have been more selective than in previous years.
Bigger, higher-quality deals have kept overall deal values strong, while the total number of deals has been more modest. Businesses with steady income, good management teams, clear growth plans or stable demand are still attracting interest from both trade buyers and private equity.
At the same time, some mid-market and smaller businesses are finding it harder to agree on price, and many deals are taking longer to complete than they used to.
What’s driving activity
A few clear themes stand out:
- Private equity is still looking. Funds are interested in platform businesses and bolt-on acquisitions, especially where earnings are reliable or there’s a clear opportunity to grow through further deals.
- Trade buyers remain active. Strategic acquirers continue to look for businesses that complement what they already do, including divisions that larger companies no longer see as core.
- Quality gets attention. Well-prepared businesses with clean financials and realistic expectations are more likely to attract competitive interest and better offers.
- Funding has become a little easier. Compared with the higher interest-rate environment of recent years, buyers using debt generally have more flexibility in their models — as long as the business can support the funding structure.
What this means for buyers and advisers
In this market, preparation makes a real difference. Deals that move forward are usually those where the buyer and their advisers have:
- A clear idea of the funding structure early on
- Realistic expectations about working capital, earn-outs and any transitional arrangements
- Access to more than one funding option
Getting the funding structure right can be the difference between a deal that stalls and one that completes. This is especially true for first-time buyers, management buy-outs, and deals that mix debt, equity and vendor support.
Looking ahead
Most commentary suggests the market will stay selective through the rest of 2026 and into next year. The strongest businesses are expected to keep attracting interest, while other opportunities may need more creative funding structures or simply take longer.
For business owners thinking about selling, management teams considering a buy-out, and advisers supporting clients through acquisitions, the advice is consistent: start talking about funding early, understand the options, and make sure the structure supports both the purchase and what the buyer wants to do with the business next.
If you’re looking at an acquisition and would like an independent view of the funding options, the ABL team is happy to help.