In Part One of this Private Company Valuation Forum, Richard Angus is joined by Doug Lawson, Founder and CEO of MarktoMarket, to examine the latest data on UK private company M&A, transaction volumes and valuation multiples.
The UK private company M&A market remains an important area for investors, business owners and advisers, but how have deal activity, buyer appetite and private company valuation really evolved in 2026?
Doug walks us through the changing private company market, including the sectors attracting M&A interest, the role of trade buyers and private equity, deal sizes, international acquirers and the factors influencing private company valuations. He examines the impact of AI on software valuations and what current transaction data could mean for the outlook for UK private company M&A. With significant capital still seeking opportunities, Doug provides a data-led perspective on where the market stands and what investors and business owners should be watching next.
Despite a challenging economic environment, deal volumes remain robust and activity is continuing. Doug explores what the data tells us about the health of the market, deal values, sector trends and the changing attractiveness of different parts of the economy.
Doug Lawson is Founder and CEO of MarktoMarket, a data platform providing information for advisers and investors in the small and mid-market.
Hardman & Co’s Private Company Valuation Forum brings together market experts to explore current activity, valuation trends and the issues affecting private companies and their investors.
03:01 – Which sectors are driving private company deal activity?
04:50 – Who is buying UK private companies in 2026?
05:40 – Private equity roll-ups and the most active acquirers
07:42 – UK private company valuation multiples: the latest data
09:02 – Deal size and EBITDA multiples: why size matters
10:07 – AI and the impact on software company valuations
12:49 – UK private company M&A outlook: resilient activity and diverging valuations
Richard Angus: Welcome to Hardman & Co’s Private Company Valuation Forum, where we explore current activity and share market insights from leading experts.
One of the things we’re finding at the moment when we talk to people is that everybody in the private company world is very busy. In fact, they’re exceptionally busy, and we see a greater degree of urgency in conversations. But really what we’re trying to get to grips with is, having discussed matters, is anything really happening?
While we have an impressive number of talented entrepreneurs and business managers in this country, their ambitions need to be understood and supported by investors when funding is required. However, it’s a very challenging economic environment at the moment, and we’re looking at investor psychology and confidence as well.
So, to give us some market perspective and current thoughts on how the world may be changing, it’s great to have Doug Lawson back from MarktoMarket, who’s going to be talking to us in a minute.
01:25 Doug Lawson: Thank you very much, Richard, and the Hardman team, for having me back.
I’m Doug Lawson. As Richard says, I’m the founder and Chief Executive of a business called MarktoMarket, which is a data platform for advisers and investors in the small and mid-market. That’s the data that we specialise in.
I’m just going to run through some slides about where the market is at the moment and look at some valuation trends as well, just to set the scene a little bit.
Just before going into the valuations, in terms of what’s going on in the market at the moment, the mainstream press might lead you to believe that the market has softened. But actually, the deal volumes that we’re seeing and recording, having stripped out our international data here, are looking pretty good in the UK.
Deal volumes are actually pretty robust. I think whoever you speak to will tell you that deals are typically taking quite a long time to complete, but they’re still happening.
You can see here that we’re actually on track, on an annualised basis, for a pretty good year in 2026, which will be pretty much in line with 2025 and 2024, and indeed quite a lot stronger than 2023.
This is looking at deal value now, another indicator of health and strength. Again, looking at the last five or six six-month periods, you can see that in H1 2026, deal value is pretty good and pretty healthy in terms of the last two to three years.
This is the split. I think it’s always interesting to look into the data and ask where these deals are happening.
What I think is quite interesting here is that, over the last five years, the proportion of deals that have happened in what we might call old-economy sectors, such as industrials and business support services, has actually increased. The attractiveness of those old-economy sectors has increased.
Whereas if you take something like TMT – technology, media and telecoms – it grew and, looking over a five-year view, peaked as a share of total deals in 2024 before softening a little bit.
It’s always quite interesting to look into the sectors where the action is happening.
Another way that you can slice and dice this data is by looking at deal sizes. As you’d expect, the vast majority of transactions are happening at the smaller end of the market. This is looking at sub-£250 million deals, so we’re eliminating what we would refer to as the large-cap market.
You can see that the trend in terms of small-cap deals – which we define as £10 million to £50 million – has actually been pretty positive.
Micro-cap deals, which we define as £2.5 million to £10 million, have been going down a bit. That was very strong in 2025. Nano-cap deals have been softening a bit as well. There were lots of these nano-cap deals – really small deals below £2.5 million – happening in 2023 and 2024, and that softened a bit in 2025 and the first half of 2026.
In terms of who’s buying businesses at the moment, in the first half of 2026, 74% of acquisitions had a trade buyer on the buy side.
When we look at financial buyers and private equity buyers, we look at money coming directly from the private equity houses, and we look at private equity-backed buyers as a separate category.
The 19% you can see there represents buyers that are corporates but are ultimately owned by private equity. So, the money is coming from private equity, albeit through a platform investment that is using that capital to do bolt-ons.
Direct private equity deals accounted for 8% of the market. This is a UK perspective; again, we’ve stripped out our international data for this particular analysis.
This is just a feel for who the most active acquirers are. I think if you look at H1 2026, what’s been very popular is this kind of roll-up theme, which I’m sure Ricky and HMT, who you’re going to be hearing from, will be very familiar with as well.
This is where a private equity firm makes a platform investment and then capitalises that platform investment to do a roll-up and complete lots of other deals.
If I look at the H1 2026 chart, most of these businesses are private equity-backed. From a private equity-backed perspective, we’re seeing roll-ups involving wealth managers, Rangers Fire and Security, fire safety services, Punch Pubs, Absolute Financial – another roll-up in the IFA space – TC Group in accountancy and so on.
Then you’ve got a couple of direct private equity houses there that obviously have national and regional presences and do lots of deals, like LDC and Foresight.
The last slide on this is quite interesting and kind of correlates to a slide we were looking at earlier. We’re seeing a bit more prudence in the data in terms of the number of platform deals that private equity is doing, and a bit of a slowdown in bolt-on activity as well.
Looking at domestic versus international acquirers, if you look at who is acquiring UK businesses, overwhelmingly it’s other UK businesses, as you would expect. But you’ll actually see that trend line has flattened over the last 12 to 18 months in terms of international buyers of UK businesses.
This is where they come from. Overwhelmingly, when you look at international buyers of UK businesses, it’s US buyers, followed by Sweden. Sweden has a number of very acquisitive businesses, predominantly listed but not all of them, that are very active in the UK market, especially in the industrial space, although not exclusively.
Okay, so multiples. What are we seeing with multiples?
We produce the MarktoMarket indices on a quarterly basis. This is where we take our own data and data that has been submitted by our customers, and we look at trends in the market.
Now, as everybody knows, multiples are very specific to different deals. But I think putting these all in a bucket together gives you some idea of how the market is tracking.
This particular chart goes back to 2021, when the median multiple was 7.9 times. That’s across all deals below £250 million.
Clearly, the deals that are happening at the larger end of that scale are going to be transacting at higher multiples, and at the lower end at lower multiples. But across the market as a whole, 7.9 times was the median EBITDA multiple in 2021.
You can see that by 2023, that had fallen by two turns to six times, and it has, albeit with a bit of a blip up in 2024, remained relatively stable since then.
So, valuations have come well off the high of 2021, which I think most people feel and certainly we see in the data.
I think far more interesting is to look at how multiples are trending in terms of deal-size brackets.
Again, after we do what we call our all-cap index, which I showed you before, we then segment the data by deal sizes. The all-cap index is this six times EBITDA here.
Down at the nano-cap end of the market, the median EBITDA multiple was 3.7 times. Then, up in the mid-cap, it rose to 10 times, and in large-cap it was 12.3 times.
There’s a real correlation, and we see this every period, between the deal size and the multiple that was paid.
The devil is always in the detail here. A lot of these deals will have deferred or contingent consideration. We normally include that in these statistics. So, if you were to exclude that, those multiples would inevitably fall.
But I think this gives a nice picture of how you see what people call multiple arbitrage play out. Where a business grows, either organically or through acquisition, and all other things being equal, the multiple will tend to get bigger as well.
Just looking into a couple of sectors. We had something called the “SaaS apocalypse” back in February, where there was a big panic around software stocks and the implications for those companies.
A new model had been released by Anthropic that could do lots of tasks that typically humans do, and there were lots of question marks over what that would mean for software companies.
We’ve seen the impact in the chart on the left-hand side. This is looking at revenue multiples for software companies. This is actually a global perspective that we’ve taken here.
It was down a little bit year on year, but there was a huge variance in terms of multiples at the bottom end and the top end of the market. We have seen some software companies that, a few years ago, would typically transact for quite high multiples of revenue, transacting in H1 for really quite low multiples.
A lot of deals simply weren’t happening. We saw softening in terms of activity in that sector as people tried to understand the impact of AI on specific software companies.
Just to give a bit of perspective there on revenue multiples, the chart on the right-hand side illustrates very starkly the difference in revenue multiples between, for example, an industrial company and a software company, and also shows the trend.
Again, looking at our industrials and business support services super-sector, at 2026 year-to-date the multiple is actually down year on year. The multiple has fallen from 7.3 times in 2025 to 6.5 times in the first half of this year, based on our data set.
Finally, there’s been quite a lot of publicity recently about pub group M&A, so just a few stats on that.
In terms of pub volumes, looking at pubs that have transacted since COVID over the last five years, on the right-hand side you can see a huge spike in the number of deals.
If you annualise the 2026 numbers, it’s going to be up again, at 164 transactions. The median EBITDA multiple we have is 8.5 times.
In terms of the most active buyers, Punch Taverns is out in the lead, followed by some other smaller groups, including Hartwood Urban Pubs, Red Oak and Young & Co.
So, I would say that the conclusions from our side are that activity is remaining pretty resilient, but we’re certainly finding from talking to our customers that deals are still taking a long time to complete.
There’s lots of capital out there. The rates have slowed down a little bit in terms of the volume of deployment, but there’s lots of capital still available.
Valuation levels seem to be diverging a little bit. The very high-quality businesses are still commanding high multiples and nice premium valuations. Everything else seems to have softened quite a bit.
We think there’s still a huge opportunity for M&A activity over the next five to 10 years through succession or lack of succession among owner-managed businesses.
There will be lots of sellers, and lots more buyer groups are emerging, whether that’s search funds, small specialist private equity houses, long-term capital vehicles targeting small companies or Swedish industrial buyers.
Hopefully, that’s going to be great for liquidity, and the increased buyer pool will help to support valuations.
