After several months of research, interviews, and data analysis, bizval has released its first UK-specific publication: The 2025 bizval SMB Report: Unpacking the current state of M&A for UK SMBs.
This report is aimed at providing small and medium-sized businesses (SMBs), advisors, and investors with practical insight into how the UK M&A landscape is shifting and what it means for decision-makers.
Why this matters
The UK SMB segment – particularly businesses with annual turnovers between £2m and £25m – is at a critical point of change. Shifts in demographics, technology, and investor behaviour are affecting how deals are sourced, structured, and completed. Whether you’re an owner considering an exit or an advisor planning for long-term growth, understanding these trends is essential.
As Graham Stephen, CEO of bizval, notes in the foreword: “This is the first region-specific report we’ve produced here at bizval, and we hope that readers can extract a lot of value from the insights we’ve discovered through a long and in-depth research process.”
bizval’s aim is to bring clarity to a complex space. Good decisions start with accurate information—especially when those decisions involve ownership transitions, succession planning, or acquisitions.
What’s driving change in the UK SMB M&A market?
According to the report, several overlapping forces are contributing to significant market changes.
1. Demographics and succession planning
One of the most consistent drivers of M&A activity is the ageing business owner population. Many founders are approaching retirement, which is contributing to a growing pipeline of businesses preparing for transition or sale.
This has created a more competitive environment for quality assets, particularly in sectors where strategic buyers and private equity firms are actively pursuing acquisitions. The report notes that business owners who engage in early and structured succession planning can potentially see valuation uplifts of up to 20%.
2. Technology as a driver of M&A
Technology adoption continues to influence M&A dynamics, especially in sectors where digital capabilities are increasingly linked to competitiveness. Some SMBs are acquiring to improve or expand their tech stack—examples include AI integration, cybersecurity, and cloud infrastructure.
In 2024, technology-led deals increased by 15%, and the report anticipates this trend will continue as both buyers and sellers prioritise digital capacity as part of their strategic goals.
3. Investor strategies are changing
Economic conditions, interest rate fluctuations, and financing constraints are shifting investor strategies. Traditional debt financing is now being complemented or replaced by capital from private equity firms and family offices, which together represent around 30% of deal funding in the UK SMB segment.
International interest is also increasing. Cross-border buyers—particularly from the US and UAE—are seeking entry points into the UK and wider European markets. This is affecting how deals are structured, with more emphasis on due diligence and longer-term planning.
Key themes from the 2025 bizval SMB Report
Financing and valuation adjustments
With increased costs of borrowing and uncertain economic conditions, buyers and sellers are using a wider range of financing models to close valuation gaps. These include earn-outs, vendor financing, and equity rollovers.
The report notes that 40% of UK SMB deals in 2024 involved alternative or mixed financing strategies—up from 25% just two years earlier. In this environment, accurate, independent business valuations are becoming increasingly important for setting realistic expectations.
Sector-specific activity
M&A activity is not uniform across sectors. Technology, healthcare, and renewable energy continue to see steady growth, with projected annual increases of 12% through 2026. Conversely, industries such as retail and manufacturing are seeing more consolidation, often driven by larger companies acquiring smaller players to improve market share or reduce overheads.
The report also highlights regional activity. London, the South East, Scotland, the North West, and the Midlands are emerging as key M&A centres, each with distinct sector dynamics. Scotland, for instance, is seeing increased interest in renewables, while London remains the most active region for technology-focused deals.
Growth in private equity and cross-border interest
Private equity now accounts for roughly one in three SMB acquisitions. These investors are often looking beyond short-term returns and are focusing instead on long-term business fundamentals and growth potential.
Meanwhile, nearly one in five 2024 deals involved international buyers. While this introduces more complexity—from legal to cultural considerations—it also creates new pathways for growth and capital access.
Common challenges in the current environment
The M&A process is increasingly impacted by regulatory requirements, valuation misalignment, and post-deal integration challenges. Factors like GDPR compliance, Brexit-related trade considerations, and employment law continue to complicate transactions.
The report outlines several ways to mitigate these risks, including early-stage due diligence, engaging experienced advisors, and planning for post-acquisition integration from the outset.
Looking ahead: Where is the market going?
Based on the current trajectory, M&A in the UK SMB sector is likely to remain active but more selective through 2025 and into 2026. Digital tools will play a greater role in deal sourcing and evaluation. Advisory support will become more specialised, and buyers will place increasing emphasis on operational resilience and future earnings potential.
Those who invest in preparation—by improving reporting, solidifying operations, and aligning with what buyers are looking for—will be in the best position to succeed.
How bizval supports this process
bizval provides independent valuation services designed for SMBs preparing for a sale, acquisition, or internal strategic planning. Our goal is to support more informed, data-driven decisions by giving owners and advisors the tools they need to navigate a shifting market.
The 2025 bizval SMB Report is part of that effort. If you’re considering a transaction or want to better understand how market trends affect your business. Contact us today to discuss your valuation needs or strategic goals. And don’t forget to download the full report for an in-depth look at the UK SMB M&A landscape.
Conclusion
The UK SMB M&A market is changing, but these changes also offer opportunities for businesses that are ready. By understanding current trends and aligning strategy accordingly, owners and advisors can improve outcomes and reduce risk.
Download the 2025 bizval SMB Report to explore the full findings, and contact us if you’d like to discuss your specific needs.
FAQs
What is the 2025 bizval SMB Report?
It’s a detailed analysis of the current M&A environment for UK SMBs with turnovers between £2m and £25m. It explores market trends, valuation strategies, and emerging challenges.
Why is succession planning a focus?
Many owners are nearing retirement. Planning ahead can increase deal value and reduce disruption during a transition.
What role does technology play in M&A?
Technology is a key driver for acquisitions, particularly for firms looking to expand capabilities or improve competitiveness.
How involved is private equity?
Private equity is now involved in around one-third of UK SMB acquisitions. Their presence is influencing deal structure and timelines.
Where can I get the full report?
You can download the full report at bizvalglobal.com, including commentary and detailed projections for 2026.