Derek Neil
Partner, Head of Transaction Services
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.
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.
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:
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.
The most successful acquirers are prioritising value creation earlier than ever before.
Key areas of focus include:
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.
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:
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