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The Mid-Market Deal Advantage

The UK mid-market continues to support discerning M&A activity, with dealmakers pursuing growth through strategic acquisitions, value creation, and innovative financing structures.

In the current year to date in 2026, BDO advised on 153 deals, including 96 private equity-backed transactions, reinforcing our position at the centre of UK mid-market deal environment. The data highlights a market where conviction remains selective, but opportunities continue to emerge for well-prepared businesses with strong fundamentals and investors with a clearly formulated investment rationale. Private equity, in particular, is favouring businesses that demonstrate resilience.

Key YTD 2026 deal statistics

Mid-market deal activity at a glance

Metric

YTD 2026

Total deals completed

153

Private equity-backed deals

96 (63%)

Average disclosed deal value

£44m

Largest disclosed transaction

£1.05bn

 

Our deal experience sits within a wider UK market in which values recovered more strongly than volumes. A small number of large transactions lifted aggregate values while activity by number remained below peak-cycle levels. The mid-market was more resilient, but execution remained selective and very dependent on quality.

Market outlook

Confidence is returning, but selectively.

Despite geopolitical uncertainty and macroeconomic pressure, the UK deals market showed improving momentum in H1 2026. Activity remained uneven with stronger deal values than volumes and competitive tension concentrated around high-quality assets in favoured sectors. Investors continued to prioritise resilient earnings, defensible market positions and credible growth opportunities.

Key themes shaping the market include:

  • Strong appetite for strategic bolt-on acquisitions
  • Increased focus on operational value creation and carve outs
  • Greater due diligence on technology and cyber risk
  • AI is now a specific investment criteria and a due diligence question with target businesses tested on AI-enablement, AI-resilience or exposure to AI disruption
  • Need to demonstrate how technology investment will support growth, efficiency and defensibility
  • Competitive financing markets supporting transactions
  • Increased inbound capital as a driver, reinforcing the importance of international buyers to the UK market

Private equity remains central to BDO deal activity

Private equity-backed transactions accounted for almost two-thirds of BDO's completed deals in the first half of 2026. This reflects our strong position in sponsor-led mid-market activity, rather than necessarily the composition of the UK market as a whole. Overall, private equity remains central to deal activity, but PE activity is selective; sponsors continued to favour bolt-ons and selected platform investments where they can build scale, accelerate growth and deliver identifiable operational improvements.

Despite improving momentum, exit routes remained somewhat constrained. Sponsor-to-sponsor transactions, continuation vehicles and other structured liquidity solutions have become more important as subdued IPO activity and longer holding periods increased pressure on sponsors to return capital. This trend means exit readiness and flexibility over route and timing are increasingly central to value creation planning.

As competition for high-quality assets intensifies, preparation and execution are increasingly becoming sources of competitive advantage.


Read our Private Equity Value Report

Mid-market Deal Advantage: Year-to-date Sector breakdown

33 Deals

Technology and Media was the most active sector for us in H1, and remains the case throughout the year to date, driven by ongoing demand for digital transformation, software and technology-enabled services. Investors are still selective, favouring resilient, differentiated technology assets over broad-based exposure to the sector.

Buyers have targeted specialist software and services businesses, such as vertical-market SaaS providers and niche IT consultancies, to broaden capability and deepen sector expertise.

Technology

Tech dealmaking has increased, driven by private equity dry powder and platform buy-and-build strategies. There is strong international appetite for UK assets given their relatively attractive valuations. AI is reshaping the SaaS landscape. Following the "SaaSpocalypse", buyers are placing a premium on businesses with proprietary data moats that are defensible against AI-driven commoditisation. These are viewed as critical differentiators for sustainable value creation.

Media, Marketing and Creative Services

Media, marketing and creative services M&A remained resilient in H1 2026, with deal volumes broadly consistent with H1 2025. Headline deal values increased significantly, largely driven by the Paramount-WBD transaction. However, underlying market activity also improved with UK marketing services deal volumes reaching their highest quarterly level since 2023. Private equity accounted for more than half of completed transactions.

The market remains highly selective. Processes are taking longer and due diligence has become more rigorous. Buyers are increasingly focused on revenue quality, scalability and margin resilience. Businesses with a clear AI strategy, strong data capabilities and technology-enabled service offerings continue to attract the greatest investor interest.

Bolt-on acquisitions and strategic consolidation activity continue to support deal flow across the sector while new platform investments remain subdued. There is ongoing demand from international buyers for high-quality UK assets with differentiated capabilities and recurring revenue characteristics.


Key contacts

24 Deals

Investor demand remains strong for resilient, innovation-led businesses and specialist healthcare services. Buyers have targeting highly specialised businesses, such as market access consultancies within pharma to enhance their strategic positioning and broaden their capabilities.

Pharma and biotech dealmaking have increased, driven by patent cliffs with strong international appetite for UK assets. AI is an increasingly important theme, both influencing valuations for companies that are at the forefront of adoption.


Key contacts

19 Deals

A steady volume of activity reflects consolidation, regulatory change, and technology-enabled growth opportunities. The trends we saw last year continue to be prevalent;

  • Larger asset managers pushing into real assets and private credit
  • Insurers and intermediaries taking more strategic and selective approach
  • Banks pushing ahead on expansion plans of specialist lending or SME finance


Wealth management remains very busy, with several processes occurring in H1 and a number of others primed for the green light in Q4 or just after.

Private equity, while now driving due diligence and pricing harder, remains open to differentiated, winning businesses. AI, as in so many sectors, is an increasingly important consideration for the continued success of a business’s operating model.


Key contacts

19 Deals

Mid-market professional and business services M&A activity remains resilient, underpinned by strong private equity interest and ongoing consolidation across fragmented markets.

High-quality businesses with specialist expertise, recurring revenue streams and technology-enabled service delivery continue to attract significant buyer interest and premium valuations. As organic talent acquisition remains a challenge, buyers are increasingly using M&A to acquire specialist teams, strengthen client relationships or accelerate digital transformation initiatives.

AI is becoming an increasingly important investment theme, shaping both acquisition strategies and valuations for businesses successfully embedding AI technology into their service delivery models and for businesses which can show resilience to AI disruption.


Key contacts

11 Deals

A notable increase in activity reflects growing confidence in selected consumer-facing businesses, despite a mixed macroeconomic backdrop. Both strategic acquirers and private equity investors remain focused on high-quality brands with differentiated customer propositions, strong market positions and clear growth potential.

A number of niche consumer subsectors, particularly pet, premium retail, and health, beauty and wellness, are demonstrating resilience as attractive structural growth drivers and loyal customer bases continue to underpin investor interest.

Scale, brand strength, pricing power and margin resilience are the key drivers of value across the consumer sector. Unique, founder-led and digitally-enabled businesses are especially sought after.


Key contact

13 Deals

UK real estate M&A activity was down over 10% compared with the previous year – a product of wider economic and geopolitical uncertainty. The sector is attracting interest where assets offer strong fundamentals, value-add opportunities or specialist market exposure. This is predominantly in operational real estate sub-sectors. Demand is strongest in sectors supported by long-term structural trends such as logistics, living, hotels and data centres. This is despite uncertainty around the economic and interest rate outlook.


Key contact

8 Deals

Deal activity remained selective in the sector as UK manufacturers continued to navigate energy, labour and supply-chain pressures and geopolitical and trade uncertainty. Buyer appetite remains strong for high-quality engineering and specialist manufacturing businesses with differentiated technology, resilient supply chains and exposure to attractive end markets such as aerospace and defence, automation, electrification and critical infrastructure.

The UK continues to attract significant international interest with overseas buyers drawn to its specialist technical expertise, intellectual property and established positions in global supply chains. There is strong transaction activity across engineering, technical and aftermarket services, particularly where businesses combine specialist expertise with recurring or visible revenue streams. Both strategic and private equity buyers remain willing to invest where there are clear earnings resilience and a credible route to growth and operational improvement


Key contacts

5 Deals

Leisure saw an increase in activity, supported by continued growth in consumer spending and demand for ‘experiences’. The sector includes many different sub-sectors and business models.

Refreshingly, AI Is going to act as a sector enhancer and potential improver of EBITDA margins rather than a disruptor of leisure businesses. Sport, restaurants and bars and travel all create experiences impossible to replace by AI. Yet, clever adoption of AI can really elevate profitability, so we expect to see a big increase in Leisure sector deal flow.

The cost of debt to the UK government and consumers may be a dampener to consumption but those consumers aged 55+ will continue to drive growth for many leisure businesses. Indeed, the FT recently reported that by 2030 63p of every pound spent in the UK by adults will be done so by those aged over 55.

So, AI-driven growth and a solid base of UK consumer demand for experiences will keep growing deal flow.


Key contacts

How are dealmakers in the mid-market gaining an advantage?

The most successful acquirers are prioritising value creation earlier than ever before.

Key areas of focus include:

  • Building 100-day plans before completion
  • Early commercial due diligence
  • Technology, AI and cyber resilience assessments
  • Management team capability
  • Finance function assessment
  • Detailed integration planning

 

The 100-day plan is increasingly serving as the bridge between due diligence findings and post-completion execution. A structured, post deal plan facilitates discipline in ensuring actions are taken a timely basis and mitigates future risk factors.

Debt and capital solutions

Financing remains supportive for well-prepared borrowers

The primary driver of lender behaviour remains deployment pressure arising from subdued deal flow. There is, however, caution around cyclical sectors and the potential impact of AI disruption. There is intense competition among lenders for attractive opportunities, resulting in margin compression, increased flexibility on terms and a more pragmatic approach to credits that may previously have struggled to attract support. As a result, well-prepared borrowers continue to benefit from highly competitive financing conditions.

Current areas of interest include:

  • Direct lending
  • Capital structure optimisation
  • Refinancing strategies
  • Growth financing
  • Sponsor-backed transactions


Find out more about our Debt Advisory services

 

Why BDO

Trusted advisers to the UK mid-market

Our Deals professionals bring together expertise across:

  • Corporate Finance/M&A
  • Financial and Tax Due Diligence
  • Commercial Due Diligence
  • Technology Due Diligence
  • Management Due Diligence
  • Modelling and Data Analytics
  • Tax Structuring
  • Debt Advisory
  • Transaction Services
  • PLC Advisory
  • Cyber and ESG advisory
  • Post-deal integration
  • Special Situations M&A


Whether you are buying, selling, raising capital or preparing for future growth, we will help you navigate complexity and maximise value.

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Derek Neil

Derek Neil

Partner, Head of Transaction Services
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Andrew Howson

Andrew Howson

Partner, UK Head of Private Equity
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Paul Russell

Paul Russell

Deal Advisory Partner - M&A
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Alex Mackay

Alex Mackay

Partner, M&A - Life Sciences and Healthcare
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