The UK’s mid-market M&A sector is bouncing back. The latest data shows that deal value is up, reflecting the stabilizing economic environment and presenting new opportunities for mid-market businesses and advisory firms.

The total value of British M&A deals in the first half of this year is 66% higher than in 2023, at £68 billion, according to PwC. This is mainly attributed to 16 deals with values above £1 billion each, seven of which make up £17 billion of the total. While deal value is up, however, there has been a 20% decrease in the number of deals, from 2,126 in H1 2023 to 1,703 in H1 2024. This reflects a shift toward larger transactions.

Amongst the best-performing sectors were technology, media and communications (TMT). Market dynamics significantly impacted technology and telecoms M&A in 2023, as declining public market valuations for tech companies spilled over into private markets, according to a report by Trowers and Hamlins. Buyers hesitated to pay premium prices, while sellers were cautious about putting assets on the market. At the same time, private equity funds, though flush with capital, were deterred from leveraging deals due to rising interest rates.

In 2024, though, the technology and telecommunications M&A landscape has shown signs of recovery, driven by stabilizing valuations and renewed investor confidence, according to PwC. As interest rates have plateaued, both buyers and sellers are re-engaging in the market with more aligned pricing expectations. Private equity firms, holding substantial capital reserves, are increasingly active, targeting high-growth opportunities in areas such as artificial intelligence, cloud computing, and cybersecurity. The ongoing emphasis on digital transformation across industries continues to fuel deal-making, as businesses aim to enhance operational efficiency and leverage advanced technologies.