Mergers and acquisitions (M&A) activity in the UK continues to be strong despite an uncertain economic outlook. At KLV Corporate Finance, we’ve seen a key trend emerge, with mid and lower M&A market activity driving deal flow. While raising capital has become increasingly difficult, the mid and lower mid-market – the space we specialise in – has proven remarkably resilient, with activity increasing from Q1 into Q2 this year.
The busiest sectors include fintech, media, technology, telecommunications, financial services, and business services. Buyers typically fall into two camps: strategic buyers, who are established companies seeking high-growth businesses that complement their own, and private equity firms, who target fast-growing companies with the potential to produce strong returns within a three to five-year timeframe. Both groups are willing to pay premium valuations for the right opportunities.
From the seller’s perspective, uncertainty about the future is driving many to act now rather than wait. UK businesses are attracting interest not just domestically, but also from buyers across Europe and North America.
Financing acquisitions is evolving too. While commercial banks remain cautious, buyers are increasingly using a mix of equity, specialist debt, and senior debt funds – lenders filling the gap left by traditional banks.
Mid and lower-market companies are especially attractive as they often carry little debt, allowing buyers to focus on growth rather than repayment burdens.
With decades of hands-on experience and over 250 transactions completed, KLV is uniquely positioned to guide business owners through this dynamic environment.
Insights shared by John Lee, Director at KLV