Businesses that have been considering an acquisition over the course of the next few months are probably wondering whether 2025 would be a good year to make an investment. You may also be pondering what the latest trends are in the world of M&A, which sectors are particularly desirable, and whether the future looks bright for deal-making – at least in the short term.
To hopefully answer all these queries, we’re going to take a deep dive into the latest trends to rock the world of UK M&A deals and uncover what they could represent for your business goals.
1. Keep an eye on AI
A major trend to stay focused on throughout 2025 is the continuing spread of AI, with the UK market set to be worth £1 trillion in a decade.
With this ground-breaking innovation becoming an essential asset for any business focused on maximising its growth and efficiency, acquirers are eager to add companies with AI capabilities to their portfolio.
Not only that, but investors are also keen to find acquisition targets with a management team or employees who are well versed in AI and have the appropriate skills to make the most of its abilities.
2. Resilience is key
While this is by no means a new trend, resilience remains high on the list of priorities this year, with companies seeking investment opportunities that can bolster their business’s longevity and capacity to weather tumultuous times.
This is hardly surprising, given the events of the last five years. UK businesses have been rocked not only by the onset of COVID but also by the cost-of-living crisis, Brexit, and the long-reaching effects of geopolitical uncertainty in other parts of the world.
So, what does this mean for M&A? Well, it suggests that would-be acquirers will be looking for existing businesses that are likely to experience continued growth in coming years; businesses with operational methods and assets that can contribute to mid to long-term resilience.
3. Certain sectors remain popular M&A targets
In 2024, several key sectors saw plenty of M&A action and, as 2025 unfolds, those sectors seem set to remain highly appealing investment opportunities. So, what are they?
Perhaps unsurprisingly, housebuilding is one of them, as a direct result of the Government’s call for the construction of 1.5 million new homes over the course of the next 5 years. With such an ambitious target to hit, the future looks bright for this sector, and it seems like an ideal time to invest.
On a related note, the renewables sector is also likely to see its fair share of mergers and acquisitions, due to another government target – this time, focused on the upgrading of over 300,000 homes to make them better insulated and more sustainable to run. Consequently, this could be the perfect time to acquire a solar PV business or a company specialising in the installation and maintenance of heat pumps.
Another sphere that looks set to flourish in the next few years is infrastructure services; in particular, the water sector. With billions of pounds set to revitalise the market from next year, the landscape is ripe for investment and companies are sure to be focusing on acquiring businesses that specialise in various areas of water management, monitoring, distribution and treatment.
Finally, fire protection remains a top priority, particularly as fire safety regulations have tightened in the wake of the Grenfell tragedy. As a result, if you’re keen to invest in a burgeoning sector which contains numerous small businesses ripe for acquisition, then fire safety could be the ideal avenue to pursue.
4. An upswing in SME activity
2025 is predicted to be an active year for many SMEs in the UK, whether they plan to be on the buy-side or the sell-side of an acquisition. In fact, over 60% of business owners are planning to acquire within the next five years, and with the economy steadying under the new Labour government’s guiding hand, conditions now seem favourable.
There are several significant benefits for SMEs that are well-placed to embark on a strategic acquisition. These include:
- Cost synergies that can help your business reduce its operating costs and bolster your cash flow.
- Access to new markets and a wider customer base.
- Diversification, through the acquisition of new products or services that complement your own.
- The addition of new talent and skills that can enhance your current offerings.
Of course, acquisitions also carry a certain amount of inherent risk, but with rigorous preparation and due diligence, many SMEs across the UK could just find that an acquisition provides a faster route to organic expansion and greater profits.
Why you should hire a business broker
Whether you’re keen to tap into one or more of these M&A trends or forge your own path to success with a strategic acquisition, you will probably benefit from in-depth guidance and expertise along the way.
That’s where the services of a reliable and experienced business broker like Harris Acquire can make all the difference. We have a wealth of knowledge and expertise when it comes to streamlining and enhancing the acquisition process for both buyers and sellers.
What’s more, you can take advantage of our Acquisition Finder Pilot, which comes with a 30-day money-back guarantee!
To find out more, don’t hesitate to give us a call on 01926 757100 or send a query to Hello@harrisacquire.com.
