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      The Bigger Picture: Flight to Familiarity and Bolt-On Dominance

      Amid the headwinds, one trend remains consistent: bolt-on acquisitions now make up the majority of deal activity, accounting for over 56% of all private equity transactions (412 deals). This suggests that sponsors are doubling down on existing platforms — opting to scale what they already know, rather than venturing into new, riskier territory.

      Buyouts (134) and minority investments (128) also saw volume, but the relative weighting tells a story: dealmakers are favouring tactical add-ons and margin-enhancing consolidation plays over transformative moves.

      This isn’t just a strategy shift — it's a reflection of how private equity is managing risk in the current environment. Deploying capital in smaller, synergistic chunks allows for greater control and quicker returns, especially when macro volatility makes long-term forecasting difficult.

      Alex Hartley
      Alex Hartley

      Partner, Head of UK Corporate Finance

      KPMG in the UK

      Naveen Sharma
      Naveen Sharma

      Partner and UK Head of Private Equity

      KPMG in the UK

      Regional and Mid-Market View: A Story of Selective Strength

      Regionally, deal activity slowed across the board — with one notable exception: the South West. That region bucked the trend with 57 deals, up from 45 a year earlier. While this may reflect a handful of concentrated transactions, it points to growing investor interest in non-London markets where valuations may be more compelling and competition lighter.

      The mid-market also showed relative resilience, with a decline of 11.3% compared to 17.1% in the wider PE market. London remained the most active region (168 deals), but strength in the North West and Midlands (41 deals each) underlines the fact that regional hubs remain critical engines of deal flow.

      As with the broader market, bolt-ons dominated mid-market activity (217 deals), again pointing to a cautious, incremental approach to growth.

      Insight: Deal Appetite Still Exists — But the Bar Is Higher

      According to Alex Hartley, Partner, Head of Corporate Finance at KPMG UK:

      “As we headed into 2025 off the back of strong deal numbers last year, the expectation was that M&A activity would continue to pick up. But economic uncertainty, driven by geopolitical events and nervousness around the impact of tariffs, has meant that the deals market has been slightly more volatile so far this year, and getting deals over the line is taking longer.”

      This longer runway to completion is being echoed across the market. With greater scrutiny on valuation, more intense due diligence, and a general push for price certainty, many deals are stalling in the final stages. It’s not a question of appetite — but of alignment.

      Still, there are bright spots. Sectors like industrials, business services, healthcare, and TMT continue to see strong interest. And with potential tax changes on the horizon in the Autumn budget, some sellers may be motivated to accelerate exits, potentially creating a window for renewed activity.

      While the first half of 2025 brought a marked slowdown, it wasn’t a market retreat — it was a recalibration. The fundamentals of UK private equity remain solid. But in this environment, discipline, precision, and timing are everything.

      Our advisory insights

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