UK dealmaking to gain momentum with PE leading the way

Last year saw businesses and investors grappling with high interest rates and inflation, sluggish economic growth and rising employment costs. While these pressures are likely to continue this year, there is genuine cause for confidence, which should provide a much-needed boost to the deals market.

In 2025, we completed a total of 237 transactions at RSM UK, totalling a deal value of over £5.7 billion. Activity was driven by, and will continue to be driven by, industries with strong recurring revenue streams such as business services – including professional services – as well as healthcare, technology and industrials.

AI adoption is increasingly being looked at by investors and influencing deal processes and valuations, making tech-enabled businesses particularly attractive.

A deal highlight in the tech industry that RSM advised on was Auto Integrate’s sale to US-based Fleetio. Auto Integrate provides a vehicle fleet maintenance authorisation software platform for fleet management companies and repair shops, enabling them to electronically submit repair orders and improve efficiency. RSM supported the shareholders of Auto Integrate throughout the highly competitive process, providing corporate finance advice, financial guidance and technical due diligence.

The deal market was hugely impacted by intense uncertainty and speculation in the lead up to the 2025 Autumn Budget, which prompted sellers to accelerate deal processes ahead of any tax changes. There remain various upcoming tax changes for business owners to contend with, including a further increase to business asset disposal relief rates in April 2026.

Last year’s Budget also announced a reduction in capital gains tax relief on the qualifying sale of companies to employee ownership trusts, rising dividend rates from April 2026, and higher property and savings income tax rates from April 2027. These changes are influencing deal timing, valuations and structuring decisions, which intensifies the need for proactive planning.

The private equity (PE) market will also play a big role in the year ahead. PE buyout activity was subdued for much of 2025, with deals down 11% from 1,713 in 2024 to 1,527 in 2025. However, activity picked up in the final quarter of the year, signalling renewed momentum for 2026, particularly as funds come under increasing pressure to deploy near-record high levels of capital and deliver returns. Add-ons will continue to dominate as the preferred route for growth, offering sponsors a lower-risk way to invest capital and build value through consolidation.

At the same time, complex carve-outs are likely to gain traction as corporates look to unlock value and streamline operations, allowing them to refocus on priority areas and let go of what no longer aligns with their business strategy.

Looking ahead, there are opportunities to be had, and confidence should grow as inflation comes down and with another interest rate cut on the cards.

While headwinds like geopolitical instability and potential tax rises remain, there’s reason to be cautiously optimistic about the year ahead, with deals to be done for those who prepare early and adapt quickly.