Traditionally, a period of international instability and low business growth is not good for investor confidence, resulting in lower prices and deal volumes; but that is not what we are seeing.
2025’s improvement continues
Last financial year, to the end of March 2026, our M&A deal volumes were 20% up on the previous year, with most deals in the £5m to £10m range. Since the turn of the year, we have seen the average deal value increase, with more deals at £20m+ and, increasingly, £40m+. So what is happening?
Equity Capital Markets (ECM)
The big moves have been in the US, with concern increasing over AI values. Despite this, large listings are pending for Anthropic, SpaceX, and others. London has seen slower growth, but last year began to show signs of movement, and that trend is continuing. For DMH Stallard, that means often tech businesses or minerals and mining businesses reversing into listed vehicles on AIM or considering IPOs.
An active ECM sector brings international investors to the UK and is generally a harbinger of increased deal activity across the market.
Growth is hard to achieve
With organic growth challenged and profitability from core businesses squeezed, corporate businesses with access to capital are looking to invest and grow rather than play it safe. This year, Scandinavian businesses have been the biggest investors in UK companies, and we have seen a noticeable shift.
US is a less reliable partner
We have not seen strong US demand, but plenty of European and Middle East interest. It seems other global regions are looking to secure their positions with strategic acquisitions and the UK remains popular.
Succession remains a challenge
We see more businesses now with owners in their 60s and 70s. With tax pressures mounting and business assets no longer safe from IHT, more owners are revisiting exit options.
Vendor Diligence
As values increase, more sellers are considering vendor diligence packs so their businesses are ready for market, can transact quickly, and create investor competition.
What could go wrong?
Global instability has the potential to slow confidence, but the need for natural resources is not slowing, and the softening of some banking (capital adequacy) restrictions should increase debt availability. For businesses looking to unlock value, it is a good time to test the market, but preparation and a clear strategy are critical.
