Our latest M&A in the mid-market report shows deal flow down 33% in 2023 but predicts a busier year ahead for 2024.
With M&A activity in the UK mid-market showing a significant slowdown in 2023 compared to the previous year, several sectors standing out as bright spots that could drive a recovery in dealmaking in 2024.
In this annual survey of mid-market M&A activity, we have focused on analysing deals involving UK company targets valued between £10 million and £250 million and a detailed analysis of the key industries that remained strong despite the turbulent economic backdrop.
With dealmakers remaining cautious about mega deals in the face of macroeconomic and geopolitical uncertainty, the mid-market may be the engine of an uptick in transactions in 2024.
Key findings in the M&A report show:
- Total number of UK mid-market deals down 33% from 270 in 2022 to 180 in 2023
- Total deal value declined from £14.4 billion to £11.4 billion
- The average deal size for UK mid-market transactions was £34.5 million in 2023
- The top three sectors were technology, media and telecoms; hospitality, leisure, food and drink; and manufacturing
- Private equity funds were involved in 38 out of the 182 deals that took place
The report provides a deep-dive into the drivers of mid-market M&A activity in a number of key UK sectors and commentary from the firm’s Corporate team sets out predictions for the year ahead.
Key drivers of deal volume for 2024 laid out in the report include:
- More certainty around interest rates
- Private equity firms sitting on significant dry powder to invest
- Distressed sellers struggling to refinance and bringing assets to market
- ESG and sustainability
- Technological transformation
The UK’s mid-market businesses are under more pressure than ever to expertly manage balance sheets, to maintain strong collaborative relationships with lenders and to recruit, retain and inspire staff, while all the time presenting a strong and sustainable business proposition to customers, clients and investors. Many mid-market businesses continued to outperform last year and deals sub-£250 million remained attractive to investors at a time when large deals were even fewer and farther between.