30th May 2025
2025 has undoubtedly ushered in a period of uncertainty for the UK mergers and acquisition (M&A) market with economic volatility, fluctuating valuations, and evolving regulatory landscapes breeding caution and more complex deal structures.
While there is no denying that a more disciplined and discerning market creates challenges, both buy-side and sell-side can still unlock significant value if they are well prepared, strategically focused and agile enough to act decisively when the timing is right.
For buyers, turbulent market conditions can often unlock opportunities in relation to businesses and assets that wouldn’t typically be available, or affordable, in more stable cycles. There is capital out there, and acquirers continue to actively look for both on and off market deals that present clear opportunities to drive growth through operational efficiencies, tech investment and strategic consolidation.
Buyers who are prepared to offer creative structuring through deferred consideration, earn-outs and sweet equity can also help bridge valuation gaps whilst reducing their upfront risk.
In this environment, traditional markers of value such as revenue multiples and market share now sit alongside more nuanced considerations such as cultural integration, financial resilience, ESG risks and regulatory exposure. Consequently, the focus on operational, financial and legal due diligence has intensified and this inevitably slows the pace of transactions.
As well as ensuring the right approvals and financing structures are in place to move decisively when a target emerges, acquirers should look to engage legal advisers early to offer insight and support on diligence and regulatory foresight, especially in relation to the National Security and Investment Act, where early legal input is essential to assess clearance risks and manage timelines.
But deal appetite and deal execution are not the same thing, and for sellers, this is a market that rewards preparation. Success will depend on a seller’s ability to provide not only robust financials and clean, complete data, but also a compelling growth story and a governance structure that can withstand the increased scrutiny from buyers and investors.
Sellers who are proactive in being transaction ready when going to market can build confidence in cautious buyers and avoid late-stage delays from unknown issues coming out of due diligence.
Exit strategy flexibility will also help ensure sellers can achieve the best outcomes, even in a slower market. Boards should consider the full spectrum of options, from trade sales to private equity investments and the transition to employee ownership, which can all be tailored to achieve stakeholder goals.
Maybe what we are actually faced with is not so much an M&A market in flux, but a recalibrated playing field where well prepared sellers can still command strong valuations and competitive interest, and agile buyers, with sector insight, can secure high quality targets, ultimately turning uncertainty into opportunity.
At Leonard Curtis Legal we work alongside some of the UK’s most dynamic businesses and boards. In the last financial year our corporate team has successfully supported clients on over 50 transactions with a combined value of £146,000,000, spanning sectors from healthcare and professional services to manufacturing and technology.
Being part of a wider business advisory group means we can draw in complementary professional advice to provide a comprehensive, solution driven approach for our clients, going beyond just the legal aspects of the relevant challenge or opportunity.
As a strategic partner to our clients, we help boards and leadership teams assess readiness and risk. Technical excellence will always be the baseline of our offering, but what clients really value is our clear, commercial advice that drives a deal forward and ensures that it stands up at completion and beyond.